The due bill period is a feature of United States securities markets that applies when the ex-date of a distribution falls after its record date instead of before it. Exchanges set a late ex-date for large events, such as a stock split, a sizeable stock dividend or a cash dividend worth a quarter or more of the share price, normally the first business day after the payment date. Between the record date and that ex-date the shares still trade with the entitlement, yet the issuer pays whoever was the holder on the record date.
To bridge the gap, each trade in the period carries a due bill: an obligation on the seller to hand the distribution to the buyer. The depository tracks these obligations automatically and settles them on the due bill redemption date, described under due bill redemption. The mechanism is comparable to a market claim in other markets.