Business, Legal & Accounting Glossary
A quiet period or quiet time was a period of time designated by the SEC whereby the issuer of an IPO was unable to make public announcements. It began when the company hired an underwriter, and would end 25 days after the security began trading.
In US securities law, the quiet period was historically a period between when a company filed a registration statement with the SEC and a number of days after the IPO.
The term quiet period is not found anywhere in the law. In the summer of 2005, the SEC voted unanimously to modify its registration, communications, and offering processes, effectively ending the quiet period. The SEC now explicitly permits companies to continue publishing normal communications during the customary quiet period, subject to certain guidelines. The quiet period practice came under intense scrutiny in 2004 after a few noteworthy incidents. In one instance, Google founders Larry Page and Sergey Brin granted an interview to Playboy magazine just prior to their firm’s IPO filing, days before the quiet period was to begin. The interview was published during the quiet period, immediately before the IPO. The SEC allowed the Google IPO to proceed on schedule despite the seeming violation of quiet period etiquette. The typical quiet period lasted up to 90 days after the IPO.
While the quiet period was never an official rule, but merely an amalgam of rulings and inferences, it essentially went out of effect on June 29, 2005, by a unanimous decision of the SEC. The rules changes of that date allow a company to correct misinformation about it or its IPO.
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This glossary post was last updated: 29th November, 2021 | 0 Views.