Definition - What does Legislative Risk mean?
Legislative Risk is the risk that the government may do something that adversely affects the value of an investment.
Testopedia explains Legislative Risk
If the Governement enacts legislation that changes the regulatory enviornement a corporation operating in that affected area may see thier business and earnings fall as a result. Utility, Oil and Gas, Banking and Tobacco companies are all examples of industies where legislation that have caused earnings to fall as a result of legislative changes.