Anticipated Holding Period

DEFINITION of 'Anticipated Holding Period'

The time period for which a limited partnership expects to hold a specific asset. A firm will disclose its anticipated holding period on assets through its prospectus. After the specified time period, the partnership will typically sell the holding, and the capital invested will be repaid to investors through a lump-sum distribution.

BREAKING DOWN 'Anticipated Holding Period'

Before a broker recommends a potential investment to an individual, he or she should evaluate and disclose the selling firm's anticipated holding periods on underlying assets. The anticipated holding period on assets can affect how investments are graded and therefore recommended to customers. For example, the anticipated holding period on underlying assets can affect mutual funds' share classes.

FINRA – the Financial Industry Regulatory Agency – enforces rules governing broker-dealers, including that they must have "reasonable grounds" for believing that a recommended transaction/investment is suitable for a customer based on his or her financial situation, needs and investment objectives.

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RELATED FAQS
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    Understand the difference between qualified and unqualified stock dividends, and when the holding period for qualified dividends ... Read Answer >>
  2. What is the difference between a prospectus and summary prospectus?

    Learn about the differences between the summary prospectus and statutory, or full, prospectus, and discover what mutual fund ... Read Answer >>
  3. What information does the SEC require in an investment company's prospectus?

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