The legal and regulatory framework for the financial sector consists of three core elements:

• The Central Banking Law (1996) that gives the National Bank of Cambodia (NBC) the power to license, supervise and regulate financial institutions.
• The Banking Law (1999) that established the framework for the organization of banks, other financial institutions, and strengthened the NBC.
• The Prakas Relating to the Implementation of Law on Banking and Financial Institutions.

Laws related to banking and financial markets are currently in the legislative process. The priority is in establishing a legal framework that ensures enforceability of financial contracts. These include the completion of new laws or amendments for contract, corporate, bankruptcy, and investment laws. Also, supervisory regulations will be revised to ensure consistency with international standards.

A Capital Market Law has been drafted to create a securities exchange commission that would establish a fully operating capital market in conformity with the Investment Law and Banking Law.

In 2004, the Ministry of Economy and Finance is expecting to adopt its draft Law on Government Securities, and draft Law on Non-Government Securities Issuance and Trading. Implementation is expected over the next few years.Issuance and trading of non-government securities and the establishment of an Independent regulatory and supervisory agency will follow. The non-government securities law will pave the way for the establishment of a securities market in Cambodia by 2007.