Published : 11 Apr 2023
1. Social Stock Exchange (SSE), a segment of the existing Stock Exchange, acts a platform for social enterprises, such as Non-Profit Organizations (NPOs) or For-Profit Social Enterprises (FPEs), to raise funds from public through the stock exchange mechanism
2. A social enterprise has to first register itself on the Social Stock Exchange after which it can begin raising funds by issuing financial instruments such as Zero-coupon bonds, zero principal bonds, equity, social impact funds, mutual funds, and development impact funds.
3. As per SEBI’s Framework, a minimum application size for a subscription of INR 2 Lakhs and a minimum issue size of INR 1 Crore are currently needed for SSE.
4. As per the terms of Regulation 292F (1) of SEBI (Issue of Capital and Disclosure Requirement) Regulations 2018 (ICDR Regulations), following criteria must be fulfilled:
4. a. An NPO is required to have spent at least INR 50 Lakhs annually in the past financial year and have received funding of not less than INR 10 Lakhs in the past financial year.
4. b. An NPO is required to be registered as a charitable trust for at least the last 3 financial years and is required to submit a statement of the utilisation of funds to the Social Stock Exchange within 45 days from the end of each quarter
5. Some countries that already have SSEs are The United States of America, Canada, the United Kingdom, Brazil, Jamaica, Portugal, South Africa, and Singapore.