To be effective, legislation not only needs to be unambiguous and fair but also should be robust enough to address all the existing concerns while, at the same time, being flexible enough to accommodate the new needs on account of evolving environment.
Role of legislation in the context of economic development in general and the financial sector in particular, is an interesting area of study. It has been argued that strong legal systems foster development of sophisticated financial markets and intermediaries2, which enhances the economy’s ability to manage risk and eventually lead to economic growth.