How long is the maturity period for commercial paper?

The maturity period for commercial paper is no more than 270 days. Commercial paper is a short-term unsecured promissory note issued by companies to raise funds for working capital needs, such as inventory purchases or meeting operational expenses. This short duration primarily reflects the intended purpose of the instrument, allowing companies to manage cash flow without committing to longer-term debt.

In regulatory terms, the limit of 270 days is important because it ensures that commercial paper remains a viable option for companies seeking immediate funding while minimizing the risk presented to investors due to the lack of security. Issuing notes with a maturity period exceeding this limit typically requires more comprehensive registration, ultimately making it less attractive for short-term financing.

Therefore, the choice of 270 days accurately encapsulates the essence of commercial paper as a tool for quick, short-term funding, distinguishing it from other financial instruments with lengthier maturities.