What is a Date of Record?

A date of record is the recorded date at which an investor must have ownership of shares of stock or other types of investments in order to earn a dividend or other form of return. Sometimes referred to as a shareholder of record date, this date helps the issuer of the security to identify exactly who is entitled to receive the dividend, making the process of calculating payments much easier. The term also has applications in other types of financial transactions and assessments.

Another situation in which the date of record is important is in the assessment of taxes. For example, it is important for a local jurisdiction to know who owns property within the jurisdiction as of a certain date of the year. This makes it possible to know who is responsible for paying the property taxes due on the real estate, and eliminates any confusion in situations where the property is sold at some point during the calendar year.

Many contracts also make use of a date of record in order to govern the terms and conditions within the contractual agreement. For example, a vendor will use the date of record as a means of identifying when the current commitment to a customer will end. This can be especially important when the terms of the contract extend the client discounted pricing for goods and services. At the same time, the customer will also be mindful of the date of record, especially if he or she wishes to switch to a different vendor without incurring penalties, or wishes to negotiate a new contract with the current vendor.

Even something as simple as a lease on an apartment contains a date of record. The date establishes when the tenant is allowed to take possession of the residence, and when the current commitment to the landlord is complete. This same date also establishes when the landlord is free to offer the apartment to a new tenant, sign a new lease with the current tenant at the same monthly rate, or increase the monthly rental fee with a new lease agreement.

In all its applications, the key function of the date of record is to establish ownership as of a specific date. With tax collection, this makes it easy to maintain accurate records and collect the appropriate amount of taxes from the current legal owner. With stocks and bonds, the date establishes who owns those shares or bond issues as of the date when dividends or interest payments are to be calculated and disbursed. With contracts in general, the date defines the rights and responsibilities of both parties who have entered into the agreement.