SEBI gives final nod for Social Stock Exchange: What is SSE? Who can list on this?

On 19 December, the National Stock Exchange of India (NSE India) received an in-principle approval from the Securities Exchange Board of India (SEBI) to set up the SSE as a separate segment.

In July, the regulator notified regulations for the Social Stock Exchange (SSE) to provide additional avenues for social enterprises to raise funds. The framework was prepared based on the suggestions of a working group and technical group constituted by the regulator.

SEBI gave in-principle acceptance to the SSE of the Bombay Stock Exchange (BSE) in October.

What is SSE?

SSE is a new idea in IndiaAnd the purpose of such a stock exchange is to benefit the private and non-profit sectors by directing more capital.

During her budget speech for the financial year 2019-20, Finance Minister Nirmala Sitharaman first proposed the concept of SSE. The Securities Contracts (Regulation) Act, 1956 was then enacted by the government, which subsequently published a gazette notification declaring the new security as “Zero Coupon Zero Principal”.

SSE will function as a separate division of the existing stock exchanges under the new regulations.

Read also: What India needs is NSE’s Social Stock Exchange

Who can list on SSE?

SSE will be a separate division of the existing stock exchanges under the new regulations. Non-Profit Organizations (NPOs) and for-profit social enterprises with social intent and impact as their primary goal will be eligible to participate in the SSE.

Additionally, such intent should be shown by its emphasis on social goals that are appropriate for under-served or less privileged populations or regions.

Social enterprises will have to engage in one social activity out of 16 broad activities listed by the regulator.

Eligible activities include-

Eliminating hunger, poverty, malnutrition and inequality

– Promoting healthcare, supporting education, employment and livelihoods

– Gender equality Empowerment of women and LGBTQIA communities

– Supporting social enterprise incubators.

Corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure companies and housing companies will not be eligible to be recognized as social enterprises, with the exception of affordable housing.

Minimum issue size as per SEBI framework 1 crore and minimum application size for membership 2 lakh is currently required for SSE.

minimum requirements

In September, the market regulator specified the minimum requirements to be fulfilled by an NPO for registration with the SSE, the disclosure requirement for NPOs to raise funds through issuance of zero-coupon zero principal instruments and the annual Disclosure requirements must be enforced. NPO on such exchanges.

About minimum requirements To meet the NPO, SEBI said that the NPO should be registered as a charitable trust and should be registered for at least three years, should have spent at least 50 lakhs annually in the previous financial year and should have received at least 10 lakhs in the last financial year.