Dividend Dates

Dividend dates create a fair bit of confusion. Hopefully, the following will help.

Firstly, from the company's perspective, there are two important dates – the 'record date' which, as we'll explain, isn't important for investors and the 'payable date', the date the company will post you your cheque or, if you've filled in the appropriate paperwork, transfer the money into your account.

Now, the record date is the date by which you must be legally recorded on the share register.

Most share trades don't settle until three business days after the order is filled so, generally, you won't be on the register until three days after your broker fills your buy order.

Thankfully, you don't have to go through the hassle of making these calculations yourself. The ASX does all the hard work by designating an 'ex-dividend date' which determines the cut-off point for those entitled to the dividend. And here comes the important part.

You must buy before the ex-dividend date to receive the dividend. The ASX usually wipes all outstanding buy orders on the ex-dividend date so no-one is caught unawares by the drop in share price that almost always accompanies a stock going ex-dividend.

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