 In this section, I will be explaining how the government regulations can help the investors to overcome the problem of adverse selection or the problem that they do not end up investing in lemons. The role of government regulation is that it helps investors or all the key players in any financial market to develop such regulations. It helps investors to develop much more information so that they can make a better decision and try to reduce information asymmetry through their regulations. As I mentioned earlier, information asymmetry means that the seller's level of information about that particular financial instrument and the buyer's level of information about the same financial instrument is not equal. We call this information asymmetry. If they are both equal, we will say that information is symmetrical. Both ends have equal information. But as information asymmetry is a common phenomenon in a financial market, it means that the seller has the security of any financial instrument, where the money will come from and generate profits or losses, where the buyer will have to pay the end of the day or by the end of the fiscal year. The seller has more information as compared to the original firm owner or the firm's manager. The government helps to reduce information asymmetry so that it facilitates investors and the company to disseminate such level of information. You have to do some annual reports and you have to spread some level of information. Apart from this, there is a lot of information about investors. When the non-performing or poor-performing firms or very good financial firms are not strong firms, when investors are told that these firms are not able to meet their finances properly or they are going to have financial problems, then what happens to them? They can have bad sentiment, their overall goodwill can be ruined. So, to cut this particular thing, what happened? The government makes some rules and regulations for regulation. They make these rules and regulations so that when they operate in any market, they have to follow the rules and regulations. In many countries, the government regulates these things through institutions so that they disseminate the level of information to a large extent. People know what the overall financial position of the firm is and how much income they have generated. Pakistan also has such a system where the Security Exchange Commission of Pakistan, which we call the SECP, regulates these firms and defines the rules for them. They tell the firms which information they have to disseminate, what kind of rules they have to follow, what kind of laws they have to perform and according to which laws they define the operating procedures. By doing this, the information asymmetries can be minimized to a greater extent. Similarly, they are required to provide sufficient statistics that they maintain a specific data set on specific variables. But in this whole series, we see that the bad firms, i.e. these are bad firms, the bad firms mean that they are not financially very strong or they are going to collapse in the future or they are not generating much revenue with them. If they have taken from people their investments, they have sold a lot of their stocks in the market and their overall financial performance is not good, and they are going to incur a lot of profit and losses that people have bought from their stocks. So, the bad firms have to follow all the rules and have to publicly announce their indicators in the form of annual reports, but what do they do? To deceive people, they fabricate their own information, they twist it a little, or they are performing poorly on the indicators, and they do not update the data on it. By doing this, they maintain the problem of adverse selection, i.e. the government regulation has helped us to regulate regulatory bodies so that investors do not do adverse selection and do not invest in lemon. But the bad firms are also saved from this regulation sometimes. What do they do? They do some fudging, they manipulate or they are not available. They do not share the information of key variables through which the information asymmetry or adverse selection works, but it does not end at all.