Last Updated: December 29, 2022, 11:36 IST
The SEBI granted the National Stock Exchange of India (NSE India) in-principle approval to establish SSE as a separate segment on December 19.
SSE is a novel concept in India, and a stock exchange of this type will benefit the private and non-profit sectors by directing more capital to them.
On December 27, The Securities and Exchange Board of India (SEBI) approved the introduction of the Social Stock Exchange (SSE) as a separate segment of BSE. The SEBI granted the National Stock Exchange of India (NSE India) in-principle approval to establish SSE as a separate segment on December 19.
The regulator announced rules for the Social Stock Exchange (SSE) in July, giving social enterprises another way to raise funds. The framework was developed based on the recommendations of a working group and technical group formed by the regulator.
In October, SEBI granted the Bombay Stock Exchange (BSE) preliminary approval for an SSE. SSE is a novel concept in India, and a stock exchange of this type will benefit the private and non-profit sectors by directing more capital to them.
Finance Minister Nirmala Sitharaman first proposed the concept of SSE during her Budget speech for the fiscal year 2019-20. The government then invoked the Securities Contracts (Regulation) Act of 1956, and a gazette notification announcing the new security as “zero coupons zero principal” was published.
Under the new regulations, the SSE will operate as a separate division of the existing stock exchanges. Under the new regulations, the SSE will be a separate division of the existing stock exchanges. Not-for-profit organizations (NPOs) and for-profit social enterprises with a primary goal of social intent and impact will be eligible to participate in the SSE.
With the exception of affordable housing, corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure companies, and housing companies will not be eligible to be identified as social enterprises.
According to Sebi’s framework, SSE currently requires a minimum issue size of 1 crore and a minimum application size for subscriptions of 2 lakhs.
In September, the market regulator established minimum requirements for NPO registration with SSE, disclosure requirements for NPOs raising funds through the issuance of zero-coupon zero-principal instruments, and annual disclosure requirements for NPOs on such exchanges.
SEBI stated that an NPO must be registered as a charitable trust and must have been registered for at least three years, spend at least 50 lakhs annually in the previous fiscal year, and receive funding of at least 10 lakhs in the previous fiscal year.
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