Zero coupon, zero principal bond (ZCZP) declared securities
Recently Ministry of Finance has declared ZCZP as securities. Thus they are included in the list of securities under the Securities Contracts (Regulation) Act, 1956.
- Presently this list includes shares, stocks, bonds, debentures etc.
- ZCZP bonds are a funding tool for the projects of non-governmental organizations. These do not require the NGOs to pay the principal amount or make any other payment in lieu thereof after the completion of the project.
- The government defines a ZCZP as an instrument issued by a non-profit organization. These shall be registered with the Social Stock Exchange of a recognized stock exchange.
- This registration will be done as per the regulations of Securities and Exchange Board of India (SEBI).
- This will help the organizations/corporates to utilize their social responsibility related funds. At the same time, it will also help non-profit organizations more transparently.
Source – The Hindu