Lock-in
Market basicsA period during which an investment cannot be withdrawn or sold.
In plain terms
Frustrating by design — and the same feature that stops you selling in a panic.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 6 terms
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Anchor investor lock-in
Regulation & taxThe lock-in on shares allotted to anchor investors in a public issue, released in two tranches — 50% at 30 days from allotment and the remainder at 90 days.
In plain terms
Split in two deliberately, so the entire anchor book could not become saleable on a single day. Both dates are arithmetic from the allotment date, which makes this the least private information in the market.
Promoter lock-in
Regulation & taxThe period after a public issue during which promoters may not transfer their shares under the SEBI ICDR Regulations — broadly eighteen months on the minimum promoter contribution and six months on holdings above it, with longer periods where the issue funds capital expenditure.
In plain terms
A shareholder who is not deciding whether to sell but is prevented from selling until a date the offer document names. The absence of selling before that date says nothing whatever about intention.
ELSS
Market basicsAlso called: Equity Linked Savings Scheme
Equity Linked Savings Scheme — a fund category required to hold at least 80% in equity, carrying a three-year lock-in and a tax deduction available under the old regime.
In plain terms
The lock-in is described as the cost and is arguably the benefit: three years in which you cannot redeem in a panic.
Foreclosure charges
Market basicsAlso called: Prepayment penalty
A fee levied for repaying a loan in full before the end of its tenure, sometimes with a lock-in period before prepayment is permitted at all.
In plain terms
It decides whether a cheaper loan you find later is actually worth switching to. Check it before signing, not when you want out.
Reversibility
Risk & psychologyAlso called: Reversible decision, Irreversible decision, One-way door, Two-way door, Cost of reversing
How much it costs, in money and in time, to undo a commitment — transaction costs, price impact, any load or penalty, the tax event crystallised, and whatever a lock-in prevents you doing.
In plain terms
Deliberation should be proportionate to this, not to the amount involved. A ₹15 lakh index fund purchase can be undone on Tuesday; ₹3 lakh of booking money on an under-construction flat cannot be undone at any price you would accept.