1. ComplianceCompliance to new laws and regulation can be a significant expense that may include the cost of changing products, processes and legal structures. The burden of compliance can be greater for small businesses with limited resources. In some cases, compliance can also be a significant expense for large multinational companies that must comply with laws in a number of countries that are perpetually in flux.
2. Investment RiskNew laws and regulations can greatly impact the value of assets and securities such as stocks. For example, a business that is facing high compliance costs may see its stock price fall.
|Overview: Regulatory Risk|
A potential for losses due to unanticipated changes to laws and regulations.