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Mahesh

22/09/22 07:44 AM IST

Sebi comes out with framework for social stock exchange.

In News 
  • The Securities and Exchange Board of India (Sebi)  came out with a detailed framework for social stock exchange, specifying minimum requirements for a Not-for-Profit Organisation (NPO) for registering with the bourse and disclosure requirements.
News Rules 
  • Under the new rules, the Social Stock Exchange (SSE) will be a separate segment from existing stock exchanges.
  • Social enterprises eligible to participate in the SSE must be not-for-profit organizations and for-profit social enterprises having social intent and impact as their primary goal.
  • These enterprises must focus on eligible social objectives for the development and welfare of undeserved and less privileged populations or regions.
  • The new framework specifies the minimum requirements of the not-for-profit organizations (NPOs) for registering with the bourse as well as the disclosure requirements.
  • The NPOs must disclose funds raised through the issuance of zero-coupon zero-principal instruments.
  • The Listed NPOs are mandated to submit a statement of utilization of funds to the SSE within 45 days from the end of quarter.
  • Social enterprises raising funds using SSEs are also required to provide Annual Impact Report within 90 days from the end of financial year.
Social Stock Exchange 
  • The idea of social stock exchange (SSE) was first introduced by Finance Minister Nirmala Sitharaman during the 2019-20 budget speech.
  • It is the public listing of Not for Profit Organization (NPO) on stock exchanges.
  • The NPOs are establishments involved in the welfare of society or community. They are set up as charitable organizations.
  • The SSE aims to provide them with alternative fund-raising instrument.
  • The investors can claim tax benefits for making contributions via the SSE. Similar mechanism is available in countries like the United Kingdom, Canada and Brazil.
Source- Live Mint 

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