Social stock exchange (SSE), where non-profit organisations can raise money, will soon be a reality in India. The National Stock Exchange (NSE) on Thursday said it has received in-principle nod from SEBI to set up an SSE as a separate segment.
“We are working towards the launch of SSE as a segment on the NSE. We believe this platform will immensely benefit the social enterprises contributing to the sustainable development goals,” Ashishkumar Chauhan, MD and CEO of NSE, said.
SEBI had notified the framework for SSE in July. It is a novel concept that was floated by the government in the 2019-20 budget. Following this, the government issued a gazette notification declaring a new security ‘zero coupon zero principal’ under the Securities Contracts (Regulation) Act, 1956.
Currently, the regulations have prescribed the minimum issue size as ₹1 crore and minimum application size for subscription at ₹2 lakh. Under the new rules, SSE will be a separate segment of the existing stock exchanges.
Eligibility criteria
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.
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.
Corporate foundations, political or religious organisations or activities, professional or trade associations, infrastructure and housing companies, except affordable housing will not be eligible to be identified as a social enterprise.