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NISM Certifications · NISM-Series-XV: Research Analyst · Corporate Actions

On which date must an investor be holding the shares in the demat account as per the settlement cycle for eligibility to receive a dividend?

The investor must buy the shares before the ex-date so that the holding is reflected in records on the record date. Buying on or after the ex-date does not give entitlement, and the payment or board meeting dates are irrelevant for eligibility.

  1. ABefore the ex-date, so that the name appears on the record dateCorrect
  2. BOn the ex-date itself, after the market opens
  3. COn the payment date only
  4. DOn the board meeting date of the announcement

Explanation

Eligibility depends on being a shareholder on the record date. With T+1 settlement the stock trades ex-dividend on the record date, so shares must be bought before the ex-date. Buying on or after the ex-date does not qualify. Payment date and board date are not eligibility cut-offs.

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