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. This applies whether your company processes sales directly through Ledgy or handles sell requests itself through its own broker.
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: Restriction periods only prevent you from selling or transferring shares. You can still exercise vested stock options during a restriction period, as long as you keep the resulting shares (for example with Hold all or Withhold to cover). Exercise methods that involve selling shares, such as Sell all and Sell to cover, are unavailable until the period ends. See Exercising during a restriction period below.
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. You won't be able to sell until the restriction period expires:
If your company processes sales directly through Ledgy, the Submit order button is disabled, so you can't create sell orders.
If your company handles sales itself through its own broker, the Submit request button is disabled, so you can't submit new sell requests.
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.
Exercising during a restriction period
You can still exercise your vested options while a restriction period is active, but only with a method that keeps your shares:
Available: Hold all and Withhold to cover.
Unavailable: Sell all and Sell to cover. These options are greyed out when you choose how to settle your exercise, because they involve selling shares.
If you already have an exercise request using Sell all or Sell to cover that is waiting for your approval, the Approve and proceed button is disabled until the restriction period ends. You can still cancel the request.
What happens to orders or requests I submitted before the period started?
This depends on how your company handles trading:
Sales processed directly through Ledgy: pending market orders are cancelled automatically when the restriction period starts.
Sales handled by your company through its own broker: open sell requests are not cancelled automatically. Your company's administrators decide whether to fulfil or reject them. If you have questions about a request you submitted, contact your company's equity administrator.
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 vested stock options with Hold all or Withhold to cover, but not with Sell all or Sell to cover.
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.