What Is the Close Period?

The close period (or closed period) is the time between the completion of a listed company's financial results and the announcing of these results to the public. The close period is typically regarded as the one-month period preceding the release of a company's quarterly results, and the two-month period before the release of its annual results.

The close period differs from a quiet period, where companies are required to embargo any public promotions before an initial public ♐offering (IPO) is made.

Understanding Close Periods

The close period is intended to prevent trading in a company's shares by its insiders ahead of the public dissemination of its financial results. This is because the insiders may be privy to information that is not yet in the public domain, and may be tempted to "jump the gun" with regard to their company shareholdings.

For example, if a company has unexpectedly had a disastrous quarter, its shares may be expected to plunge once the financial results are released. A corporate insider who sells some or all of his or her shares in the company before the news is released to the general public would be subject to severe sanctions from the regulators, including 澳洲幸运5官方开奖结果体彩网:disgorgement of profits if any, fines and even incarceration in extrem☂e cases.

Why Companies Tend to S🎃top Making Statements During a Close Period

Companies typically refr๊ain from releasing price-sensitive statements or news during the close period. Companies may choose to withhold making statements during the close period to prevent the company’s shares from being affected ahead of the release of the expected financial resu🅺lts.

If possible, a trading statement or other news might be issued prior to the start of the close period. Companies can host discussions with investors and analysts befor𓂃e the close period commences. It is also possible that statements and news relevant to the financial results would be released as part of the filings or shortly after.

For instance, the company might wait until the financial results are published before revealing the test results for a new product or plans for a new initiative to expand operations. There can ♊be cases wherein a company must report news or statements during the close periꦬod even if it might influence share prices. Accidents and calamities that affect the company’s operations may need to be publicly acknowledged. A disaster at a company’s major production facility could not be ignored regardless of a close period. The sudden or unexpected departure of members of executive management likewise can call for public statements by the company that cannot wait.