Legal investments

Legal investments

Investments that a regulated entity is permitted to make under the rules and regulations that govern its conduct.

Legal Investment

An investment allowed for institutional investors under the legal and regulatory rules of the country in which it is made. Institutional investors, notably banks, handle funds on behalf of clients, who may or may not be interested in investing themselves. As a result, many institutional investors are restricted from making certain high-risk investments. In the case of bonds, legal investments are called investment-grade.