This development comes after the capital markets regulator, in July, notified rules for Social Stock Exchange (SSE) to provide social enterprises with an additional avenue to raise funds.
According to PTI report, SSE is a novel concept in India and such a bourse is meant to serve the private and non-profit sectors by channelling greater capital to them and the idea of SSE was first floated by Finance Minister Nirmala Sitharaman in her Budget speech for the financial year 2019-20.
In its circular, the regulator specified minimum requirements to be met by a NPO for registration with SSE, disclosure requirement for NPOs raising funds through the issuance of zero-coupon zero principal instruments and put in place annual disclosure requirements that needs to be made by NPOs on such exchanges.
Listed NPO will have to submit a statement of utilisation of funds to SSE, as mandated under Sebi's rules within 45 days from the end of quarter. Additionally, Sebi has asked social enterprises raising funds using SSE to disclose Annual Impact Report (AIR) within 90 days from the end of financial year, capturing the qualitative and quantitative aspects of the social impact generated by the entity and where applicable, the impact that is generated by the project or solution for which funds have been raised on SSE.
Under the rules, SSE will be a separate segment of the existing stock exchanges. Social enterprises eligible to participate in the SSE will be entities — NPOs and for-profit social enterprises — having social intent and impact as their primary goal. Also, such an intent should be demonstrated through its focus on eligible social objectives for the underserved or less privileged populations or regions.
It is important to note that the social enterprises will have to engage in a social activity out of 16 broad activities listed by the regulator. The eligible activities include eradicating hunger, poverty, malnutrition and inequality; promoting healthcare, supporting education, employability and livelihoods; gender equality empowerment of women and LGBTQIA communities; and supporting incubators of social enterprise.
(With inputs from PTI)
