With respect to tainting of financial assets held to maturity (on classification as such), it is a prohibition on classification of an asset/ investment as held-to-maturity (HTM) 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.

As a result of tainting, a time-out period is observed- which is the 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.