The National Stock Exchange (NSE) has received final approval from the Securities and Exchange Board of India (Sebi) on February 22, 2023, to set up a Social Stock Exchange (SSE) as a separate segment of the NSE, according to a press release from the exchange.
The SSE aims to provide a new avenue for social enterprises to finance social initiatives, give them visibility, and increase transparency in fund mobilisation and utilisation by social enterprises. Any social enterprise, Non-Profit Organisation (NOPs) or For-Profit Social Enterprises (FPEs), that establishes its primacy of social intent can get registered or listed on the Social Stock Exchange segment, the release said.
Eligible NPOs can begin by registering on the SSE segment. After onboarding, NPOs can initiate the fund mobilisation process by issuing instruments such as Zero Coupon Zero Principal (ZCZP) via a public issue or private placement. Currently, the regulations have prescribed a minimum issue size of Rs 1 crore and a minimum application size for subscription of Rs 2 lakhs for ZCZP issuance.
For FPEs, the process of issue and listing of securities shall be the same as applicable for issue and listing of securities under the existing processes of the Exchange (based on eligibility criteria for the Main Board, the SME Platform, or the Innovators Growth Platform, as applicable, in addition to the criteria provided to be eligible as Social Enterprises), according to the details available in the press release.
