Legislative risk(redirected from Legislative Risks)
The risk that new or changed legislation will have a large positive or negative effect on an investment.
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The risk of loss due to a change in law in a particular jurisdiction. In general, legislative risk is the same is political risk, though the latter encompasses situations like coups and terrorism while legislative risk refers to changes in law according to due process. An (extreme) example of legislative risk is the possibility that the holder of a real estate investment trust will suffer a loss if the government passes a law that nationalizes all land in the country. More commonly, legislative risk deals with changes such as requirements to provide more benefits to employees or free trade agreements that make an industry less competitive against its foreign counterpart.
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