Never heard of either term, can't make heads or tails of them with some Latin knowledge, either.
Good to know. The official stock exchange term is "dividend stripping", i.e. some form of tax evasion.
Investors and banks trade shares of a DAX group
with ("cum") dividend entitlement, i.e. before the payment date, when the dividend has not yet been paid out, and
without ("ex") dividend entitlement after the payment date, when the dividend has just been paid out. A dividend tax of 25 percent is automatically levied on the dividend for private individuals. Institutional investors, such as funds or banks, are exempt from the tax; they can reclaim it from the state.
In contrast to the cum-ex transactions, which have been declared illegal in 2021, the blocks of shares in cum-cum transactions are sold under the law of obligations before the dividend effective date
with (
"cum") dividend entitlement and also transferred in rem
with (
"cum") dividend entitlement, so that the shares at the time of the dividend effective date are owned by the purchaser, a corporation with unlimited tax liability in Germany. Ultimately, this enables the buyer to offset or reimburse the dividend tax, which is essential for the functioning of the business.
Cum-cum and cum-ex deals essentially differ in the main goal they pursue. While cum-ex transactions are aimed in particular at multiple reimbursement of capital gains tax, stakeholders making use of cum-cum transactions merely want to avoid paying capital gains tax to the state via detours.
PS: Sorry for my non-understandable prose™. I hope I translated all those technical terms properly; stock exchange parlance is not my métier. 🤷🏼♂️