Cooling-Off Rule

Cooling-Off Rule

1. A rule of the SEC 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 are any previously unforeseen problems. The cooling-off period is usually 20 days, but the SEC may change that for individual offerings at its discretion.

2. A clause in many contracts allowing the buyer of a good to return it to the seller in exchange for the amount paid for it for up to three days, without committing breach of contract. The cooling-off rule allows a buyer to restore the status quo before the contract was entered for any reason for a limited period of time. It is also known as buyer's remorse.
Mentioned in ?
References in periodicals archive ?
THE Federal Trade Commission's Three-Day Cooling-Off Rule gives consumers three days to cancel purchases of $25 or more for a full refund.
A comprehensive set of cooling-off rules: external experts will be automatically barred from joining EFSAs scientific panels if in the preceding two years they have been employed by, acted as consultants to, or have offered scientific advice to organisations that work in areas covered by EFSAs remit.