SEBI nod for Social Stock Exchange (SSE)

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SEBI nod for Social Stock Exchange (SSE)

  • Recently National Stock Exchange (NSE) has got SEBI approval for Social Stock Exchange (SSE).
  • Social Stock Exchange (SSE) acts as a regulated funding platform. Here profit-making social enterprises (FPEs) and non-profit organizations (NPOs) can raise funds for social purposes.
  • Presently, organizations engaged in the social sector (FPEs and NPOs) raise funds through Corporate Social Responsibility (CSR), Impact Investing, Philanthropic/Government grants etc.

Some of the world’s leading social stock exchanges –

  • Social Stock Exchange of United Kingdom, Social Venture Connection of Canada, Impact Investment Exchange of Singapore etc.
  • The idea of SSE in India was introduced by the Union Finance Minister in the budget speech for the year 2019-20.
  • Later, the government issued a notification under the Securities Contracts (Regulation) Act, 1956 declaring a new security ‘Zero Coupon Zero Principal (ZCZP).
  • ZCZP can be issued publicly or privately by non-profit organizations. To issue it, it is necessary to register in the Social Stock Exchange of the National Stock Exchange.
  • Earlier in July 2022, SEBI had also notified rules for Social Stock Exchange.

Advantages of Social Stock Exchange (SSE)

  • Makes possible the participation of people in social welfare through equity.
  • Provides additional capital to improve the lives of the underprivileged.
  • Takes advantage of private sector participation. In this way, it plays the role of supplementing the government efforts in achieving the goals related to development.
  • It brings together social enterprises and impact investors on a common platform.
  • Raises funds as well as makes public operational and financial information through standard reporting.

Source – The Hindu

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