Legislative risk

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 ?
Declines in investment performance, a key-man event, and/or legislative risk which negatively impact the company's ability to raise FAUM and generate fees, and/or impairment of the liquidity profile could result in negative rating action.
This means more training, quality assurance requirements and legislative risk for shrinking teams of military maintainers and operators to manage.
Risk sharing, on the other hand, means that the government will assume regulatory and legislative risk while the private sector covers the planning and design risk.
Proposed state legislation for mandatory firearms insurance is another example of legislative risk.
As with other truly revolutionary technologies, ordinary risks are amplified, such as that of litigation, and ordinarily irrelevant considerations may become important, such as the heightened level of both domestic and foreign legislative risk.
Legislative risk occurs because of potential changes in current law that may erode the value of current and past tax positions.
In my opinion, the two greatest risks to municipal-bond investing are what they always have been: interest rate risk and legislative risk.
5x; a substantial weakening of its liquidity profile; and/or sustained declines in investment performance, a key man event, or legislative risk that negatively affects the company's ability to raise FAUM and generate management fees.
The most significant risk facing the cannabis industry is legislative risk," said David Friedman, MJIC CEO.
Ratings are constrained by legislative risk inherent in the industry, uncertain term funding availability for the private education loan product, and limited revenue diversity, given its concentration in educational products and services.
Rating constraints include DFS's concentrated and cyclical business model, heavier reliance on wholesale funding, potential funding sensitivity associated with internet deposits in a rising rate environment, the likelihood of asset quality reversion from current levels, threats from disruptive technologies in the payments space, and elevated regulatory and legislative risk.
Declines in investment performance, a key man event, and/or legislative risk which negatively impact the company's ability to raise FAUM and generate fees, meaningful increases in leverage, and/or impairment of the liquidity profile could result in negative rating action.
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