The market regulator SEBI has notified a framework for the social stock exchange to provide social enterprises with an additional avenue to raise funds.
Key highlights
- The framework for the Social Stock Exchange (SSE) has been developed on the basis of the recommendations of a working group and technical group constituted by the regulator.
- The social stock exchange is meant to serve the private and non-profit sectors by channelling greater capital to them.
- The idea of SSE was first floated by Finance Minister Nirmala Sitharaman in her Budget Speech 2019-20.
- Under the new rules, SSE will be a separate segment of the existing stock exchanges, according to the three separate notifications issued by SEBI on July 25.
- Non-profit organisations desirous of raising funds on the SSE will be required to be registered with the exchange.
- Social enterprises (SEs) eligible to participate in the SSE will be entities — non-profit organisations (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 (SEs) will have to engage in a social activity out of 16 activities listed by the regulator.
- The eligible activities include eradicating hunger, poverty, malnutrition and inequality; among others.
