In securities processing, the effective date is the day on which a corporate action takes legal effect. It is the key date for events that change the security itself instead of paying something out: a merger, a share split or consolidation, a change of name or identifier, a redenomination or a scheme of arrangement. From that date the old security ceases to exist in its previous form, and the new shares, ratio or name apply. The date is set by the issuer, a court or a regulator and published in the corporate action announcement.
The effective date sits alongside the other key dates of an event. The record date fixes who is entitled, and the payment date is when cash or securities are delivered; for many reorganisations these coincide with or closely follow the effective date. Custodians update positions and reference data on that day as part of corporate action processing.