Rsv Shareholder's Action Group

Monomono,

"I have posted this question before, but I am guessing that it was missed in the mass of other postings: If a buyer does not become a share member until the settlement of the trade, how come they are entitled to any dividends as soon as the trade is made? IE: if I purchase shares on a T+10 the day before they go ex-div, I am still entitled to the dividend even though the settlement will not be made until 10 days hence, and therefore I do not appear on the Shareholders Register.

I don't understand how I can have a beneficial ownership of the shares, and yet I cannot use the voting rights. Am I missing something?"


Only shareholders physically receive dividends from the Company.

In your theoretical example, if your name does not physically appear on the share register in time for the dividend to be allocated to you (ie on the "Record Date") then you will NOT be paid the dividend by the Company. (Full stop.)

It then follows that the person who you bought the shares from has to make a compensatory payment to you equal to the dividend, since you are entitled to the dividend and they have sold the dividend to you. But the cash that you physically receive is paid to you by the vendor of the shares and NOT by the company.