provision included in a new rule that exempts from the rule a person or business already engaged in the activity coming under regulation.
provision included in a new rule that exempts from the rule a person or business already engaged in the activity coming under regulation. For example, the Financial Accounting Standards Board might adopt a rule effective in 1998 relating, say, to depreciation that, under a grandfather clause, would exempt assets put in service before 1998.
when a law is changed or a new law is passed, those whose specific activity was legal under the previous law are often allowed to continue, by virtue of this provision.
Example: All real estate brokers are allowed to continue to practice as brokers after licensure requirements increase. The new law affects only new licensees; old licensees are grandfathered.
