Why are record date and ex-date important for investors?

The record date is the cutoff date set by a company to determine which shareholders are officially "on the books" and therefore will receive a declared dividend or distribution.

Investors must purchase a stock at least one business day before the ex-dividend date to be listed as an official shareholder by the date of record—in other words, to be eligible for corporate action.

These two dates are crucial because company ownership changes constantly, so a cutoff date is needed to establish who receives corporate action.

The ex date also marks the day when a stock begins trading without the adjusted priced into its share price.