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Beware Dividend Investors: T+2 rule push past Ex Div Date

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  1. #11

    Join Date
    Dec 2018
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    As others have pointed out, T+2 is the standard settlement arrangement for most transactions executed on HKEx. There is nothing random about it.

    Possibly what is causing confusion is that the broker will credit the purchased securities to your account with them immediately after purchase (so you could deal with them immediately if you wished) but this is only a book entry and is entirely different from what happens when the trade is settled though HKSCC/CCASS and Henderson's share register.

    "Stock and money positions of all Exchange Trades and Clearing Agency Transactions are required to be settled on T+2 day whereas stock positions of China Connect Securities Trades are settled on T day. SI transactions are settled on the settlement day stipulated by both Participants."

    Full details here: https://www.hkex.com.hk/Services/Settlement-and-Depository/Settlement?sc_lang=en


  2. #12

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    May 2018
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    thank you, yes thats right I never paid attention to the settlement date but in my defence I must say I also never got a notification letter that the settlement day is 4 days later (including the weekend). Thats made me startled and confused.
    Can you explain the last paragraph you wrote? I am not familiar with the terms of "cum entilement" . what does that mean in layman's terms : is the purchase date the determining factor in this or the settlement day (which falls on Ex Div date)?
    thank you for clarifying this since its not clear to me the way you explained it.


  3. #13

    Join Date
    Oct 2010
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    Trading before ex-date is cum-dividend. Pricing reflects buyer will receive dividend

    Trading on or after ex-date is ex-dividend. Pricing reflects seller will recieve dividend.

    traineeinvestor likes this.

  4. #14

    Join Date
    Nov 2005
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    If you ask me, for a normal retail player that only intends to buy, collect dividend, sell, with mix of the three in any sequence, then just remember:
    - if you want to get the next dividend/entitlement to be paid out, BUY the shares latest one day before the Ex-Dividend/entitlement date.
    - if you want to get the next dividend/entitlement to be paid out on a share you own but are going to sell, SELL the shares earliest on the Ex-dividend/entitlement date.
    Just relate the Ex-Date against the day you buy/sell shares. That's sufficient. We can call it the 'economics calender' of the shares.
    Entitlement refers to things like scrip distributions, rights issuance, and any other stuffs the bankers can think of to confuse the investors.

    Shri's table, the settlement dates, the record date, the book closure date, these generally follows the actual 'physical calender' of the shares. Don't match your economics days against your physical days. They are not suppose to.

    Its quite a bunch of technical jargons, but there are reasons traditionally the exchanges put consideration into these stuffs e.g. failed settlement (if the seller doesn't have shares to deliver), short sales (e.g. you short-sell shares that are entitled to dividend but return shares later that is ex-entitlement)....


  5. #15

    Join Date
    Aug 2019
    Posts
    15

    @makeITcount, payable date was September 16, did you receive your dividends?


  6. #16

    Join Date
    May 2018
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    Quote Originally Posted by PetravanderVegt
    @makeITcount, payable date was September 16, did you receive your dividends?
    Yes I did

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