daz, I just had an interesting conversation with a CommSec broker.
He said that although the transfer of funds for a sale transaction might take place 2 days later (T+2 settlement), the ownership of the shares "should" be transferred at the time of sale, and the company's register also updated on that day.
Needless to say, this is not what I expected to hear.
The question is, when does the company take a snapshot of it's register, and when is the register updated? Is there a lag time between the updating of a company register and a buy/sell transaction, and if so, what is that time? If one's shares are Chess sponsored, who holds the register?
I also called the Computershare register, who said the shares are Chess sponsored, so they could not answer the question, only my broker CommSec could answer it.
According to this CommSec broker, who did not sound convincing to me, the register of a company "would" get updated that day, for example, on the Friday if someone sells on the Friday, and would logically therefore not be the owner on a Monday. I can't figure this out, so I've also sent CommSec an email asking for an explanation.
There seems to be 2 things happening here. Firstly, the process for the change of ownership on a company register, and secondly, the exchange of monies for a trade. These do not seem to be synchronized, and only seem to have a "loose" association with regard to timing. And is the updating of a company register different for Chess sponsored, compared to other sponsors?
I find all of this to be something of a curious anomaly, because it would seem from what the CommSec broker said to me, that to sell some FFX on Friday June 3rd, those shares will not be owned by you on the Monday record date and not included in the Leo distribution calculations.
The other interesting question this brings up is this. Is there a difference then between an ex-dividend entitlement date, and an ex-in specie entitlement date, with regard to the updating of a company register using Chess v Non-Chess sponsored holdings?
It's all very interesting, and as most things on the Share Market, somewhat opaque.
This would make a good research project for an academic, or Masters/PhD student. I'd love to put a "timer trace" on a company register, across multiple companies, and multiple registries, recording all updates to company share ownership, and exactly when those updates occurred in relation to the timing of buys and sells on-market, where the buy/sell information came from, and many other factors.
From what the CommSec broker told me, the only certainty that one's shares in a company on a record date and time, is to not sell before that date and time. But this is also not always true, and I know this for a fact, because once or twice I have sold a share before the record date but still received the dividend.
Gw
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