What Is a Blackout Period?

A blackout period is a term that often refers to a temporary period in which access is limited or denied. This term is often in regards to contracts, policies and business activities. For example, when a political party is unable to advertise for a set amount of time before an election.

In investing, blackout refers to a period of around 60 days during which employees of a company with a retirement or investment plan cannot modify their plans. A notice must be given to employees in advance of a pending blackout.

In a firm, a blackout period may happen because a plan is being restructured or altered.

Fast Facts

  • Often refers to a temporary period in which access is limited or denied.
  • A period of around 60 days during which employees of a company with a retirement or investment plan cannot modify their plans.
  • A blackout period may happen because a plan is being restructured or altered.

SEC Protections

The Securities and Exchange Commission (SEC) protects employees during blackout periods. This protection is so that employees are not at a disadvantage, and keeps directors and executive officers fro purchasing or selling securities during the blackout.

Real World Example

For example, if a pension fund is shifting from one fund manager to another at a different bank, this restructuring would cause a blackout period at the firm.