The Securities and Exchange Board of India (SEBI) has given final approval to the National Stock Exchange (NSE) to establish a Social Stock Exchange (SSE) as a separate segment of the NSE.
What precisely is a Social Stock Exchange?
- The Social Stock Exchange (SSE) is a platform that connects social enterprises with investors seeking both social and financial returns.
- Organizations that prioritise social impact over profits are known as social enterprises.
- SSE aims to provide these organizations with access to capital markets and raise awareness about social investment opportunities.
Who is eligible to be listed for SSEs?
- Any social enterprise, Non-Profit Organizations (NOPs), or For-Profit Social Enterprises (FPEs) that establishes its primacy of social intent can register or be listed on the Social Stock Exchange segment.
- Eligible non-profit organisations can begin by registering on the SSE segment.
- Following onboarding, NPOs can begin fund mobilisation by issuing instruments such as Zero Coupon Zero Principal (ZCZP) through a public issue or private placement.
- For ZCZP issuance, the regulations currently require a minimum issue size of Rs 1 crore and a minimum application size of Rs 2 lakhs.
How will SSE function?
- The SSE will be a distinct section of the NSE where social enterprises can list their securities.
- Investors interested in social impact investing will be able to trade these securities.
- To assist social enterprises in improving their operations and measuring their social impact, the SSE will also provide a variety of services such as capacity building, impact measurement, and reporting.
Advantages of SSE
- SSE will give social enterprises access to capital markets and help them raise funds for their social projects.
- SSE will provide a platform for investors to invest in social enterprises and contribute to social impact.
- SSE will also establish a transparent marketplace for investors to evaluate the social impact of their investments.
Source: https://www.moneycontrol.com/news/business/markets/nse-gets-the-final-sebi-approval-to-launch-social-stock-exchange-10147071.html