Regulatory risk

1.

The risk that transactions or business relationships may have unforeseen adverse regulatory consequences.

For example, giving rise to additional costs or to the inability to enforce legal rights.

2.

The risk that the administration of regulatory matters may be more costly - or otherwise more burdensome - than foreseen.

Regulatory risk usually refers to possible future changes in regulations. But it may also arise from misunderstanding of - or inadvertent non-compliance with - existing regulations and practice.

See also

• Compliance risk
• Regulation
• Risk