What is XDIS
XDIS is a symbol appearing on the consolidated tape of an exchange to indicate a security that is trading ex-distribution or without the right to receive the next distribution. It derives from the term ex-distribution.
BREAKING DOWN XDIS
XDIS is intended to provide timely and accurate information that a stock’s distribution, or dividend, has been paid. Typically, a stock's price will depreciate immediately when it is trading ex-distribution or ex-dividend. The consolidated tape will indicate this occurrence by adding the letters "XDIS" immediately after the stock's symbol. The consolidated tape is a high-speed electronic system that includes stock price data generated from multiple trading platforms including traditional securities exchanges, electronic communication networks and third market brokers dealers.
For example, ABC XDIS 15 or ABC/XDIS would indicate that company ABC is trading ex-distribution at $15. A temporary suffix, such as XDIS, represents a temporary change to the underlying security because of current market conditions. The typical format for including the suffix is the security's symbol (such as stock ABC), followed by a forward slash (indicating a temporary change) and then the suffix (XDIS). More than a dozen symbols can appear for a stock on the consolidated tape, indicating additional information on a stock such as share class or a new issue.
For an investor to determine whether they should receive a dividend, they need to look at two important dates. They are the record date or and the ex-dividend date or ex-date. When a company declares a dividend, it sets a record date when an investor must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information. Once the company sets the record date, the ex-dividend date is set based on stock exchange rules.
The ex-dividend date for stocks is usually set one business day before the record date. A security that is trading XDIS entitles a seller (a previous owner), rather than the buyer, to receive the last declared dividend prior to the sale. This distinction is important as the price of a stock may fall by the amount of the dividend on the ex-dividend date.
Special Circumstances Related to XDIS
If a dividend is 25% or more of a stock’s value, the ex-dividend date will be deferred until one business day after the dividend is paid. When a company pays a dividend in the form of stock rather than cash, the stock dividend may be paid in additional shares and the procedures may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid and is also after the record date.
Investors who sell their stock before the ex-dividend date are obligated to deliver any shares acquired as a result of the dividend to the buyer. The day an investor can sell their shares without being obligated to deliver the additional shares is not the first business day after the record date but is usually the first business day after the dividend is paid.