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Economics

Social Stock Exchange (SSE)

  • The Securities Exchange Board of India (SEBI) has given the National Stock Exchange of India (NSE India) in-principle approval to establish the Social Stock Exchange (SSE) as a separate segment.
  • SSE is a novel concept in India, and it is hoped that a stock exchange of this type will benefit the private and non-profit sectors by directing more capital to them.
  • The concept of SSE was first proposed by Finance Minister in her Budget speech for the fiscal year 2019-20.
  • The government then invoked the Securities Contracts (Regulation) Act of 1956, and a gazette notification announcing new security as “zero coupon zero principal” was published.
  • Under the new regulations, the SSE will operate as a separate division of the existing stock exchanges.

Who can list on SSE?

  • Under the new regulations, the SSE will be a separate division of the existing stock exchanges.
  • Not-for-profit organizations (NPOs) and for-profit social enterprises with a primary goal of social intent and impact will be eligible to participate in the SSE.
  • Furthermore, such intent should be demonstrated by a focus on social goals that are appropriate for underserved or underprivileged populations or areas.
  • The social enterprises will be required to participate in one of the 16 broad activities listed by the regulator.

The following activities are eligible:

  • Getting rid of hunger, poverty, malnutrition, and inequality
  • Promoting health, education, employability, and livelihoods
  • Women’s and LGBTQIA communities’ gender equality and empowerment
  • Supporting social enterprise incubators

Who are not eligible?

  • With the exception of affordable housing, corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure companies, and housing companies will not be eligible to be identified as social enterprises.
  • SEBI’s framework currently requires a minimum issue size of 1 crore and a minimum application size for the subscription of 2 lakh for SSE.
  • Sustenance requirements at a minimum
  • NPOs must be registered as charitable trusts for at least three years and must have spent at least Rs. 50 lakh in the previous fiscal year.
  • They should have received at least 10 lakh in funding in the previous fiscal year.
Source: https://www.livemint.com/market/stock-market-news/sebi-gives-final-nod-for-social-stock-exchange-what-is-sse-who-can-list-on-it-11672192595818.html
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