The policy affects only Kingdom events, not Baronial, Shire, or College events. It also does not affect the Estrella War, according to a published letter from the Atenveldt Seneschal.
According to Duchess Katerina O'Callaghan, the Atenveldt Kingdom Seneschal, "The new policy is NOT part of Kingdom Law or Kingdom Financial Policy. It is just a 'KFC Policy' that the KFC will use as a guideline when we review and approve Kingdom Event Bids."
The link above goes to a document in Adobe Acrobat (PDF) format. The document is also linked from the Seneschals section of http://www.atenveldt.com/offices/officer_procedures_and_reports.htm .