A blackout period is a duration of time when access to something usually available is prohibited.
In a financial context, a blackout period is a duration of time when a company's executives and/or employees who are privy to inside information are restricted from buying or selling any corporate securities. The purpose of blackout periods is to prevent insider trading based on information that is not available to the general public.
Many companies have regular blackout periods in conjunction with fiscal quarter and fiscal year earnings reporting because corporate insiders are in possession of information prior to its public disclosure. A company may also enforce a blackout period when news of some event or potential event will not immediately be made public. Examples of such events are mergers and acquisitions (M&A), technological advances and corporate reorganization, among a great number of other possibilities.
Trading blackout periods are mandated by the company in question, rather than the Securities and Exchange Commission (SEC) or some other organization that regulates trading-related activities. However, the SEC does prohibit insider trading during blackout periods.
A related term, quiet period, refers to similar periods of time, related to similar events, that prohibit corporate insiders from selectively divulging information to some investors before that information has been made public.
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