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Template:Record amount paid amount ex amount (view source)

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[[File:Dividend cycle.png|450px|thumb|right|How the dividend cycle interacts with the Dividend Periods in the {{eqderivdefs}}.]]
===Careful: it’s (meant to be) about ''timing'', not amount===
===Careful: it’s (meant to be) about ''timing'', not amount===
So what is the difference betwixt a {{eqderivprov|Record Amount}}, {{eqderivprov|Paid Amount}} and {{eqderivprov|Ex Amount}}? To be clear, it is ''not'' about ''whether'' you get paid, nor ''how much'', but ''when''. A {{eqderivprov|Dividend Amount}} is a {{eqderivprov|Dividend Amount}}: in each case “100%<ref>Or whatever other percentage you agree, of course.</ref> of the gross cash dividend per Share”, end of the day. What this is all to do with is  ''when'' a {{eqderivprov|Dividend Amount}} is deemed to occur, which in turn is a function of which {{eqderivprov|Dividend Period}} the trigger for the dividend falls in.
So what is the difference betwixt a {{eqderivprov|Record Amount}}, {{eqderivprov|Paid Amount}} and {{eqderivprov|Ex Amount}}? To be clear, it is ''not'' about ''whether'' you get paid, nor ''how much'', but ''when''. A {{eqderivprov|Dividend Amount}} is a {{eqderivprov|Dividend Amount}}: in each case “100%<ref>Or whatever other percentage you agree, of course.</ref> of the gross cash dividend per Share”, end of the day. What this is all to do with is  ''when'' a {{eqderivprov|Dividend Amount}} is deemed to occur, which in turn is a function of which {{eqderivprov|Dividend Period}} the trigger for the dividend falls in.
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*The trigger where {{eqderivprov|Ex Amount}} applies is the '''[[ex date]]''' for the dividend in question. You should pay the gross cash dividend on the {{eqderivprov|Cash Settlement Payment Date}} for that {{eqderivprov|Dividend Period}} in which the [[ex date]] falls.
*The trigger where {{eqderivprov|Ex Amount}} applies is the '''[[ex date]]''' for the dividend in question. You should pay the gross cash dividend on the {{eqderivprov|Cash Settlement Payment Date}} for that {{eqderivprov|Dividend Period}} in which the [[ex date]] falls.
*The trigger where {{eqderivprov|Paid Amount}} applies is the '''payment date''' for the dividend in question. You should pay the gross cash dividend on the {{eqderivprov|Cash Settlement Payment Date}} for that {{eqderivprov|Dividend Period}} in which the dividend is paid.
*The trigger where {{eqderivprov|Paid Amount}} applies is the '''payment date''' for the dividend in question. You should pay the gross cash dividend on the {{eqderivprov|Cash Settlement Payment Date}} for that {{eqderivprov|Dividend Period}} in which the dividend is paid.
[[File:Dividend cycle.png|450px|thumb|center|How the dividend cycle interacts with the Dividend Periods in the {{eqderivdefs}}. Click to expand.]]


===Hang on a minute. “Paid”? Is that, like, different to “declared”? On purpose?===
===Hang on a minute. “Paid”? Is that, like, different to “declared”? On purpose?===
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But as for the very good question ''why'' would ''any'' [[equity derivative]] purport to pay out a {{eqderivprov|Dividend Amount}} ''before'' the actual real-world payment date for the Dividend it is synthetically replicating? This is a question only {{icds}} would be placed to answer, and they’re not talking.
But as for the very good question ''why'' would ''any'' [[equity derivative]] purport to pay out a {{eqderivprov|Dividend Amount}} ''before'' the actual real-world payment date for the Dividend it is synthetically replicating? This is a question only {{icds}} would be placed to answer, and they’re not talking.
===[[Dividend clawback]]: if the {{eqderivprov|Issuer}} doesn’t actually pay a declared dividend===
Nor does the [[User’s Guide to the 2002 ISDA Equity Derivatives Definitions]]. It suggests, without saying in which cases, that you might need a clawback right if you don’t want to be on the hook for a {{eqderivprov|Dividend Amount}} declared but not eventually paid by the {{eqderivprov|Issuer}}<ref>This is a JC bastardisation of typically grim ISDA textical contortion, needless to say.</ref>: 
:'''''{{eqderivprov|Dividend Recovery}}''': If the amount an {{eqderivprov|Issuer}} actually pays to {{eqderivprov|Share}}holders of record in respect of a {{eqderivprov|gross cash dividend}} is less than the amount declared (a “'''{{eqderivprov|Dividend Mismatch}}'''”) the {{isdaprov|Calculation Agent}} may calculate a payment under the {{isdaprov|Transaction}} to account for {{eqderivprov|Dividend Mismatch}} and compensate for interest incurred by the party that made the relevant payments. Where the amount actually paid by the {{eqderivprov|Issuer}} to {{eqderivprov|Share}}holders of record for any such dividend is paid or (scheduled) after the {{eqderivprov|Termination Date}}, this provision will still apply even though relevant settlement date has passed. If the {{eqderivprov|Issuer}} subsequently corrects the under-payment, the {{isdaprov|Calculation Agent}} may make a further adjustment.''
“Parties should consider,” further ruminates the [[User’s Guide to the 2002 ISDA Equity Derivatives Definitions|User’s Guide]], in typically passive-aggressive fashion, “the potential [[credit risk]] created by this provision and may wish to consider whether such amounts are adequately covered under the definition of “{{csaprov|Exposure}}” under any relevant [[credit support document]].”
But on what planet would an {{eqderivprov|Equity Amount Payer}} want to be liable for a [[dividend]] ''declared'' but not ultimately ''paid'' by the {{eqderivprov|Issuer}}? And ''why''?That would be to do something [[equity derivative]]s are expressly designed not to do.
===House view: S.N.A.F.U.===
The [[JC]] concludes this is simply a howler in the {{eqdefs}} which ISDA hastily tried to cover up with that clawback malarkey. In any case, to be safe, reference the {{eqderivprov|Paid Amount}}. Consensus amongst market professionals we have consulted is that {{eqderivprov|Paid Amount}} does, as its drafting suggests, depend on the {{eqderivprov|Issuer}} ponying up. That is where you want to be. <br>
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