SEBI approved the launch of the Social Stock Exchange

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.
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