A period of time during which an entity is not allowed to classify any financial assets as held to maturity (HTM) if its portfolio is found to have been tainted (a tainted portfolio) during the current financial year, or during the two preceding financial years. This period relates to a situation (tainting) in which classification of an investment as held-to-maturity (HTM) is prohibited if the reporting entity, during the current reporting year or the two preceding years, has sold, transferred or exercised a put option on a significant amount of the investment, initially classified as held-to-maturity, before maturity date.
In a nutshell, a time-out period marks a time-out ban (on classification of a financial asset as held to maturity) as a result of tainting.
