Sunday, December 4, 2011

Settlement date before transaction date?

I received a dividend in my brokerage account from a closed end fund I invested in. THe transaction date is Jan 23, but the settlement date was Jan 7. How can this be?|||Settlement date is the date the money is to be transferred. Transaction date is the date the transaction is deemed to occur. For instance you buy a bond with the transaction date of July 15. All interest due is calculated to that date. Settlement might be July 16 when the bond is transferred to you and you transfer the money to the seller.





With dividends there is a date when the owners as of that date receieve the dividend, called date of record, then a later settlement date when the funds are transferred.





Not sure what these dates mean since it is unusual to have a transaction date after settlement.

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