Hi- I have received multiple practice questions about who sets the ex-dividend date for different securities. The most recent question I just had, the answer was the BOD sets the ex-dividend date for open end management company distributions. However, can I have a list for who sets the ex dividend dates of the other types of securities please?
Hi @Alan_Sawayn great question! This topic is covered in the Transactions section 7.3.3 of the textbook. It explains that when a mutual fund makes a dividend or capital gains distribution, the Board of Directors (BOD) is responsible for setting all key dates, including the ex-dividend date, record date, and payable date.
This differs from how stock dividends work. For regular corporate stocks, closed-end funds, and ETFs, the exchange or FINRA sets the ex-dividend date because it controls settlement. However, for open-end mutual funds, the BOD sets it, as the fund itself determines the settlement timing. Hope this helps!
Best,
Mataia