Introduction
A restriction period (also called a lock-up period or blackout period) is a specified timeframe during which you cannot sell, transfer, or otherwise dispose of your awarded shares or stock units.
Your company sets these restriction periods to comply with regulatory requirements, protect company interests, or align with specific events like an IPO. During a restriction period, you'll see clear notifications in your Ledgy account, and the ability to sell shares will be temporarily disabled.
What is a restriction period?
A restriction period is a time window when you are temporarily prevented from selling or transferring your shares. These periods are set by your company and typically relate to:
Post-IPO lock-ups: After an initial public offering (IPO), company insiders and early investors often face a restriction period, typically lasting 90-180 days, where they cannot sell shares. This helps stabilise the stock price after going public.
Blackout periods: Companies may implement blackout periods around earnings announcements or other material events to prevent insider trading.
Regulatory compliance: Your company may impose restriction periods to comply with securities laws or regulations in your jurisdiction.
Note: It's important to understand that restriction periods only prevent you from selling or transferring shares. You can still exercise stock options during a restriction period if your options are vested and exercisable. The restriction only applies when you attempt to sell the shares themselves.
Where you'll see restriction period notifications
Your Ledgy account will clearly display when you're subject to a restriction period in two key locations:
On your Dashboard
When you have an active restriction period, a yellow banner will appear in your dashboard section. This banner provides a high-level notification that a restriction is currently in effect for your account.
On the Sell Shares page
When you navigate to the Sell Shares tab, you'll see a yellow banner at the top of the page displaying the restriction period details. This banner includes specific information about the restriction, such as when it will end. The Submit order button will be disabled, preventing you from creating sell orders until the restriction period expires.
Once the restriction period ends, the yellow banners will automatically disappear, and you'll be able to sell shares normally. No action is required from you when the restriction period expires, the system will automatically enable selling once the period ends.
Important considerations
Automatic enforcement: Restriction periods are automatically enforced by the Ledgy system. You don't need to track dates manually, the system prevents selling during restricted periods.
No action required: When a restriction period ends, selling is automatically re-enabled. You don't need to contact anyone or take any action.
Company-controlled: Your company's administrators set and manage restriction periods. You cannot remove or modify a restriction period yourself.
Only affects sales: Restriction periods only prevent selling or transferring shares. You can still exercise stock options during a restriction period if your options are vested.
Clear visibility: You'll always see clear notifications when a restriction period is active, so you're never uncertain about your ability to sell.
Legal compliance: Restriction periods are often legally required or contractually mandated. Attempting to work around them could have serious legal and financial consequences.