Hi there,

My wife recently bought a few shares of PICO and they're going to pay a dividend on Feb 13. They're XD on Jan 29.

But from what I understand one has to keep them longer than the Xd date Jan 29 to get paid: to get the dividend she'd have to hold the shares till the registration date (what they call book closing date for collecting) ?

If she holds the shares till Feb 3 and sell them on Feb 4 she will get the dividend? Right?

or can she sell say on Jan 30 and still get the dividend?

Could someone explain? She's a newbie and it ain't my cup of tea

Details below:

Type of dividend payment : Cash dividend payment
Record date for the right to receive : 02-Feb-2015
dividends
Book closing date for collecting : 03-Feb-2015
shareholders names under Section 225 of
the Securities and Exchange Act
Ex-dividend date : 29-Jan-2015
Payment for : Common shareholders
Cash dividend payment (baht per share) : 0.20
Payment for : Preferred shareholders
Cash dividend payment (baht per share) : 0.20
Par value (baht) : 1.00
Payment date : 13-Feb-2015

Thanks for your help!

ex-dividend date is the first day, when a new shareholder is not entitled for the next dividend. In your example, if somebody buys the shares on 29 January, they will not receive a dividend on 13 February.

Record date (in your case 2 February) is the date your wife MUST be registered as shareholder, otherwise she will also not receive the dividend on 13 February.

therefore, your wife can sell starting 3 February.

The xd date is the date that e(x)cludes the (d)ividend. Any buyer on the xd date will not be entitled to/ is excluded from the dividend. Conversely anyone selling on xd date will still get the dividend, as they are selling shares that exclude the dividend.

So basically all you need to remember is hold them at the end of the day before xd and you're OK to get the div. So in your wife's case, if she is still holding them at end of 28 January she will get the dividend.

The rest is just technical mechanics of how the share register and book keeping works.

Cheers

Fletch

ex-dividend date is the first day, when a new shareholder is not entitled for the next dividend. In your example, if somebody buys the shares on 29 January, they will not receive a dividend on 13 February.

Record date (in your case 2 February) is the date your wife MUST be registered as shareholder, otherwise she will also not receive the dividend on 13 February.

therefore, your wife can sell starting 3 February.

The first two parts are right, but last sentence isn't quite accurate. She can sell on 29 January (xd date).

The mechanics are as follows:

Settlement is T+3, i.e 3 working days after trade date. The register/ record of shareholdings is updated on settlement date

So for someone buying on Wed 28 Jan, settlement (T+3) is Mon 2 Feb, so they will be on the register on the record date of 2 Feb.

If they sold on Thu 29 Jan, T+3 is Tue 3 Feb, when it settles. Hence they will be on the books on 2 Feb as at record date, and the books updated on 3 Feb/ day after they sold.

If you think about it logically, it has to be this way. If you say she has to hold to 3 Feb, that implies that if she sold 29 Jan (xd), 30 Jan or 2 Feb, she wouldn't get the div because she sold. However, the other side of the order (the buyer) by definition also cannot have the dividend on xd date or after xd date/ days after, so the buyer can't have on 29 Jan, 30 Jan and 2 Feb either. That means that no-one (not the buyer or seller) during the dates 29, 30, 2 Feb would get the div if what you imply holds true

The record date is effectively the cut-off date for who gets or not, just need to remember that trading is T+3.

So the easy thing to remember is you must buy before the xd date. Buying on the xd date is too late, as buying xd excludes the dividend. Because someone must get the div, selling on xd date is OK as one of the buyer/seller on xd date must get the div

Cheers

Fletch

ex-dividend date is the first day, when a new shareholder is not entitled for the next dividend. In your example, if somebody buys the shares on 29 January, they will not receive a dividend on 13 February.

Record date (in your case 2 February) is the date your wife MUST be registered as shareholder, otherwise she will also not receive the dividend on 13 February.

therefore, your wife can sell starting 3 February.

The first two parts are right, but last sentence isn't quite accurate. She can sell on 29 January (xd date).

The mechanics are as follows:

Settlement is T+3, i.e 3 working days after trade date. The register/ record of shareholdings is updated on settlement date

So for someone buying on Wed 28 Jan, settlement (T+3) is Mon 2 Feb, so they will be on the register on the record date of 2 Feb.

If they sold on Thu 29 Jan, T+3 is Tue 3 Feb, when it settles. Hence they will be on the books on 2 Feb as at record date, and the books updated on 3 Feb/ day after they sold.

If you think about it logically, it has to be this way. If you say she has to hold to 3 Feb, that implies that if she sold 29 Jan (xd), 30 Jan or 2 Feb, she wouldn't get the div because she sold. However, the other side of the order (the buyer) by definition also cannot have the dividend on xd date or after xd date/ days after, so the buyer can't have on 29 Jan, 30 Jan and 2 Feb either. That means that no-one (not the buyer or seller) during the dates 29, 30, 2 Feb would get the div if what you imply holds true

The record date is effectively the cut-off date for who gets or not, just need to remember that trading is T+3.

So the easy thing to remember is you must buy before the xd date. Buying on the xd date is too late, as buying xd excludes the dividend. Because someone must get the div, selling on xd date is OK as one of the buyer/seller on xd date must get the div

Cheers

Fletch

thanks for your correction and explanation

just so your wife is aware, the dividends usually come with a tax credit as well. These are useful for next year's tax return.

Thank you all, especially fletchsmile!