Legislative risk

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Legislative risk

The risk that new or changed legislation will have a large positive or negative effect on an investment.

Legislative Risk

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.
References in periodicals archive ?
More and more organisations are now faced with direct and continuously evolving operational and legislative risks as a result of market disruption or malpractice in their supply chains,' comments Bespoke CEO Andrew Hillman.
We believe that legislative risks have largely abated, and do not expect to see further NPL inflows in this part of CEB's loan book.
Finally, many solar-diesel hybrid applications are built in countries with certain legislative risks that must be considered in the PPA.
The principal risks now included potential exposure to movements in commodity prices, legislative risks and the response of Sembcorp's customers on the Wilton site to the recession.
Moreover, in the high-end vodka niche, Synergy should be better protected from legislative risks (stricter legislation aimed at increasing vodka prices to reduce consumption).
CRISIL's rating on the long-term bank facilities of Digamber Capfin Ltd (DCL) continues to reflect DCL's exposure to increased regulatory and legislative risks associated with the microfinance sector and to the constrained funding environment across microfinance institutions (MFIs).
Gibson said looming legislative risks should be enough of an incentive to look for alternatives now.
For example, there are regulatory and legislative risks, professional, contractual, competitive and human resource/cultural risks, reputational, strategic, customer, operational, political, legal, financial, and technological risks.
Primary rating concerns facing CMS and Consumers relate to the execution of the large capital spending plan and recovery lag associated with sales weakness due to the still struggling Michigan economy, a gas rate case, and legislative risks associated with a competitive market structure.
These rating strengths are offset by Equitas's the relatively unseasoned loan book and regional concentration, exposure to increased regulatory and legislative risks associated with MFI sector and constrained funding environment across the MFI sector.
Primary rating concerns facing CMS and Consumers relate to the execution of the large capital spending plan and recovery lag associated with sales weakness due the still struggling Michigan economy, pending electric and gas rate cases, and legislative risks associated with a competitive market structure.