Cooling-off period

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Cooling-off period

The period of time between the filing of a preliminary prospectus with the Securities and Exchange Commission and the actual public offering of the securities.

Cooling-Off Period

An SEC rule mandating that several days transpire between the filing of a new issue's prospectus and the actual offering of the issue. This allows potential buyers and the seller to have a final chance to investigate the new issue and attempt to determine if there will be any previously unforeseen problems. The cooling off period is usually 20 days, but the SEC may change that for individual offerings at its discretion. It is also called the waiting period.

cooling-off period

The required waiting period between the time a firm files a registration statement for a new security issue with the SEC and the time the securities actually can be issued. The cooling-off period is usually 20 days, although the SEC may alter it for individual issues. Also called twenty-day period, waiting period. See also effective date.

Cooling-off period.

In the financial industry, a cooling-off period applies when a new issue is being brought to market. During this time, also known as the quiet period, investment bankers and underwriters aren't permitted to discuss the issue with the public.

In the consumer world, during a cooling-off period, you can cancel your obligation to purchase a product or take a loan without penalty if you change your mind.

Different kinds of transactions are governed by different cooling-off rules. For example, one federal rule allows you to cancel home improvement loans and second mortgages within three days of signing.

Another gives you three days to return purchases you make at places other than a merchant's usual place of business, such as at a trade show.

The law governing your cooling-off rights, sometimes known as buyers' remorse rules, is included in the fine print on any agreement you sign.

References in periodicals archive ?
On April 3, 2002, the California Board of Accountancy proposed a policy that would have imposed a two-year cooling-off period before supervisory members of an audit team would be allowed to accept employment with a company they have just audited.
Each statement identified the position held by the former auditor, the length of the cooling-off period, and the new position at the former client.
Statement 1 depicts a former audit manager who accepted the controller's position with the audit client with no cooling-off period.
When the length of the cooling-off period was increased to two years (statement 5), 79.
These results suggest that members of state boards of accountancy perceive that a cooling-off period can significantly reduce the negative impact on independence from the revolving-door phenomenon of former audit managers accepting controllers' positions with former clients.
Statement 2 depicts a former engagement partner who took the CAO position with the audit client with no cooling-off period.
This suggests that the presence of a cooling-off period positively impacts the perception of audit firms' independence by members of state boards of accountancy.
These results suggest that members of state boards of accountancy perceive that having a cooling-off period can significantly reduce the possible negative impact on independence from the revolving-door phenomenon of former audit engagement partners accepting the CAO positions with former audit clients.
It is interesting to note that significant differences were not found relative to the general statement that CPA firms should be independent of their audit clients (Section A, item 1), and perceptions regarding CPA firms' independence for a manager (Section B, item 1) and an engagement partner (Section B, item 2) without a cooling-off period.