Blackout Period

Definition:

In the United States, a period during which certain employees of a company are not allowed to buy or sell that company’s securities, including Option or other securities issued pursuant to Option or retirement plans. Known as a Close Period in the United Kingdom.

Section 306(a) of the Sarbanes-Oxley Act prohibits any director or Executive Officer of a Public Company from purchasing, selling, or otherwise acquiring or transferring any security of the company during a pension plan Blackout Period that temporarily prevents plan participants from engaging in such transactions. A pension plan Blackout Period usually occurs when major changes are being made to a pension plan. The purpose of the SEC rules is to prevent Insider Trading that could otherwise occur during the period when changes are being made.