An ongoing project is on track according to project plan. However, a recent regulation change will have a major impact to the project. The project sponsor's NEXT step should be to:

Seeking exemption is a highly unlikely and potentially non-viable option that should only be considered after understanding the full impact and implications.

Performing an impact analysis and updating the business case is the crucial next step because it systematically assesses how the new regulation affects project scope, cost, schedule, and benefits, and quantifies these changes within the original justification for the project. This provides essential information for informed decision-making regarding the project's future.

Submitting for reapproval is premature; the sponsor first needs to understand the extent of the impact before presenting revised information to the steering committee.

Rescoping the project without a thorough impact analysis could lead to unintended consequences or fail to address all regulatory requirements.