Securities terms - Date concepts within the securities market

Generic dates

Record date

The record date is the most important date within securities trading, this is the date when the transaction was created and reflects the date when it should be entered into the accounting ledgers.

Trade date

The trade date is the day when a transaction is considered to have been completed. Normally the trade date is the same date as the record date, however, in some instances the trade date can be an earlier date than the record date but never a later date.

Settle date

Settle date is the day when cash and securities change owners; normally this is three days after the trade date. There are exceptions however like Germany, trading of funds and currencies. The lingo within the industry defines this day as “S” and when referring to the day before settle the definition “S-1” is often used. In the same way the trade date is defined as “T” and since settle often takes place three days after trade the settle date could be referred to as “T+3”.

Value date

This is the day when cash starts earning interest. Value date is often described in relation to settle date. The value date can be the same date as settle date although it can occur both before and after the settle date 
depending on the direction of the cash transfer.

Example

A customer buys 1,000 Apple shares the 14th of January, the bank neglects to book the trade on that date and instead the trade is booked the day after. In this case the trade date is the 14th but the record date is the 15th.

Dates relating to structured products

When referring to trading of structured products there are a few more important date definitions to consider.

Last subscription date

Until this date the buyers of structured products can subscribe to a new issue. When a subscription is received the receiver should send an order confirmation to the subscriber, which defines terms of payment among other details. This event should not be mixed up with the confirmation note which is 
generated when the subscription has been executed at the close of the issue.

The last subscription date is different than the last trade date which is defined below.

Start date

The start date for a structured product defines the day when the product starts trading on the secondary market following the close of the new issue.

Last trade date

This is the last day on which transactions can be made in the secondary market for the product before it reaches expiration.

Expiration date

Expiration date is the date when a structured product expires and is liquidated and the security is replaced with cash based on the expiration value of the product.

concepts_within_securities_dates.pdf