Also known as the ex-date, the first day after the declaration of a dividend or other distribution on a class of stock on which a purchase of shares of that stock does not entitle the purchaser to participate in the dividend or distribution because the trade will not settle by the record date for the dividend or distribution.

In the case of a trade that settles on the second trading day following the trade date (T+2 settlement), the ex-dividend date will be the first trading day before the record date for the dividend or distribution.

For a further discussion of these concepts, including a timeline showing the ex-dividend date in relation to the declaration of a dividend and concurrent purchases of securities, see Practice Note, Anti-dilution Adjustment Formulas in Convertible Bonds: The Ex-Dividend Date.