A security (debt security, equity security, etc.) that has traded for a period of time long enough (e.g., 90 days) for the market to establish/ determine its real value. In specific context, especially in relation to transactions involving foreign securities/ foreign investors, securities cannot be traded unless enough time has elapsed since first flotation (introduction to the market for the first time). On particular exchanges, unregistered securities cannot be sold to national investors, yet sales to foreign investors may still be possible. Once such securities become seasoned, restrictions on sales to national investors will be lifted.
The condition of being “seasoned” is meant to ensure that a security has publicly traded in the secondary market long enough to remove any short-term effects and pricing connections that might have resulted in the stage of initial public offering (IPO).
In the Euromarket, a seasoned security is any security that has been issued and actively traded in that market for a minimum number of 40 days.
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