SEBI seeks public comments on the Report Submitted by the Technical Group on Social Stock Exchange

Last updated: 07 May 2021

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The Securities and Exchange Board of India (SEBI) is inviting the public to provide comments on the report submitted by its Technical Group concerning the Social Stock Exchange (SSE). This report builds on previous recommendations and outlines a framework for social enterprises, including Non-Profit Organisations (NPOs) and For-Profit Social Enterprises (FPEs), to participate in the SSE. Key recommendations cover eligibility criteria, reporting requirements, fundraising mechanisms, and the regulation of social auditors.

Securities and Exchange Board of India Press Release No. 17/2021 SEBI seeks public comments on the Report Submitted by the Technical Group on Social Stock Exchange Pursuant to announcement made by the Honble Finance Minister in her budget speech for FY 2019-20 regarding Social Stock Exchanges, SEBI had constituted a Working Group (WG) on Social Stock Exchange (SSE) in September, 2019 under the Chairmanship of Shri Ishaat Hussain. The WG made appropriate recommendations relating to perm

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FAQ :

The Technical Group's report aims to develop a framework for onboarding Non-Profit Organisations (NPOs) and For-Profit Social Enterprises (FPEs) onto the Social Stock Exchange (SSE), including defining social enterprises, prescribing disclosure requirements, and recommending regulations for social auditors.

Social Enterprises (SEs) eligible to participate are entities (NPOs and FPEs) with social intent and impact as their primary goal. They must be engaged in at least one of 15 broad eligible activities, target underserved populations, and have at least 67% of their activities qualifying for the target population.

For NPOs, recommended instruments for raising finance include equity, Zero Coupon Zero Principal bonds, Mutual Funds, Social Impact Funds, and Development Impact Bonds.

Initially, only reputed firms or institutions with relevant expertise will be allowed to conduct social audits. These institutions will employ social auditors who have completed a certified course by NISM and are empanelled with a proposed Self-Regulatory Organisation (SRO) under the ICAI.

A Capacity Building Fund (CBF) of Rs 100 Crores is recommended to help NPOs and other stakeholders navigate the SSE, its processes, and instruments, as well as to create awareness. It is proposed to be housed in NABARD.

Public comments on the recommendations should be sent by email no later than June 20, 2021.