Lock In
Lock-in is a specified period during which an investor is restricted from selling shares or other financial instruments. This mechanism is designed to prevent the price and liquidity of the asset from fluctuating dramatically due to sudden sales. A lock-in period is often applied to shares held by promoters, major shareholders, or in certain types of investment funds. For example, in mutual funds, lock-in periods are common in close-ended funds and Equity-Linked Savings Schemes (ELSS), where investors are required to hold their investments for a specified time, typically ranging from 3 to 5 years.
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