cooling-off rule

1. Business: A purchase contract clause that allows a buyer a period (typically three days) to return the product purchased without committing a breach of contract.

2. Investing: A Securities and Exchange Commission (SEC) regulation whereby a short period (20-25 days) is required between the filing of a public offering prospectus and the initial public offering (IPO). The period allows potential investors time to investigate the issue. See also cooling-off period.