Contingency Corner: Regulatory Risk
Regulatory Risk in Emerging Markets
Why regulatory environments shift quickly
Several factors make regulatory change harder to anticipate in emerging markets than in more established ones:
- Legislation can move from proposal to enforcement in a matter of weeks
- Enforcement priorities often shift with new political leadership or public pressure
- Licensing and permitting requirements may be applied inconsistently across regions or agencies
- Formal notice periods for regulatory changes are sometimes shorter than the time needed to comply
- Local requirements can diverge from, or directly conflict with, requirements in your home jurisdiction
Staying ahead of regulatory change
Organizations that manage regulatory risk well tend to treat it as an ongoing function rather than a periodic review. A practical approach includes:
- Assigning clear ownership for tracking regulatory developments in every jurisdiction where you operate
- Building relationships with local legal counsel who can flag changes before they take effect
- Reviewing licenses, permits, and registrations on a set schedule rather than only when renewal is due
- Mapping which parts of the business are most exposed to a given regulatory change before it happens
- Building buffer time into compliance timelines so a shortened notice period does not become a crisis
Frequently asked questions
Is regulatory risk the same as compliance? Not quite. Compliance is meeting the rules as they currently stand. Regulatory risk is broader: it includes the possibility that the rules themselves change in ways that affect your operations, timelines, or costs.
How often should we review our regulatory exposure? Most organizations benefit from a formal review at least quarterly, with informal monitoring ongoing in between, especially in jurisdictions where past changes have come with little warning.
Interested in strengthening your organization’s security and contingency posture? Contact our team.