due bill

Due Bill

A financial instrument used to document and identify the seller's obligation to deliver securities sold to the buyer.

Investopedia Commentary

For example, a buyer that purchases a stock ex-dividend, but before the dividend is paid, would provide a due-bill stating that the dividend payment should belong to the seller.

See also: Ex-Dividend

due bill

A statement of a liability by one party to another party following a transaction. In the case of a security transaction, a due bill reflects money or securities owed by one broker to the other broker. For example, stock purchased on the ex-dividend date gives the seller rather than the buyer the right to receive the subsequent dividend. However, because the actual payment date of the dividend may follow the ex-dividend date by as much as a month, the buyer will be required to sign a due bill indicating that the dividend belongs to the selling party. Also called bill.