Grandfather clause

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Grandfather clause

A provision included in a new rule or regulation that exempts a business that is already conducting business in the area addressed by the regulation from penalty or restriction.

Grandfather Clause

A clause in a new law, regulation, or anything else that exempts certain persons or businesses from abiding by it. For example, suppose a country passes a law stating that it is illegal to own a cat. A grandfather clause would allow persons who already own cats to continue to keep them, but would prevent people who do not own cats from buying them. Grandfather clauses are controversial, but they are also relatively common.
References in periodicals archive ?
Then, using historical parameters, we show that the value of the option to switch between bond classes and the value of the grandfather clause have nontrivial magnitudes.
For the purposes of illustrating the effects of the grandfather clause, however, the following abstraction seems reasonable.
Therefore, when taxables enjoy the cost advantage (|Delta~ |is less than or equal to~ 0), the value of the grandfather clause can be defined as the value of holding the old exempts minus the value of switching into taxables and investing optimally thereafter.