Record and payable dates are important to keep track of because they relate to dividends earned and paid out to investors from an investment fund. The record date of an investment dividend refers to the date that the corporation's board of directors sets as the deadline for investors to be counted on the company's books. On the date of record, the board of directors will determine which shareholders to send various financial information about the fund to.
The payable date refers to the date that any declared stock dividends are due to be paid out. Investors who purchased their stock before the ex-dividend date are eligible to receive dividends on the payable date. If the stock is still owned by the seller on the ex-dividend date, then he will be the one who receives the dividend.
Suppose a record date is set by a corporation for May 14th and an ex-dividend date of May 12th is decided upon. If Company A is selling stock to Company B, Company B would have to complete its stock purchase on or before May 12th, not May 14th, to receive any reported dividends from the stock.
Typically, the ex-dividend date is determined by stock exchange rules and is usually set for two days before the date of record. Consequently, although it's important to be aware of all deadlines pertaining to a dividend dispersal, knowing the ex-dividend date is crucial to understanding whether or not a person is entitled to receive a dividend payout on the payable date.