grandfathering (redirected from grandfather)

grandfathering

An alteration of the rules that apply to a certain investment or investment technique while stipulating that investment actions taken before a certain date remain subject to the old rules. For example, Congress may change the law by stipulating that certain types of municipal bonds no longer pay tax-free interest while at the same time grandfathering the municipal bonds issued before the date on which the new law is to take effect.