MARKET STANDOFF AGREEMENT

An agreement that restricts company insiders to sell their shares in the market for a specified number of days after the company made its initial public offering (IPO). Company insiders are barred from selling their holdings, as stated in the term. An agreement between the underwriters to the issue and insiders of the company, it usually lasts for 180 days, but can last from 90 days up to one year. This agreement is done to avoid declines in a stock after the commencement of trading due to massive insider sales.