News Update

The NSE has received in-principle approval from SEBI to establish a social stock exchange

• ByStartupStory     |    December 23, 2022

In India, a social stock market (SSE) where non-profit organizations can raise funds will soon be a reality. The National Stock Exchange (NSE) said on Thursday that it has acquired in-principle approval from nw to establish an SSE as a separate division.

“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.

In July, SEBI announced the framework for SSE. It is a revolutionary idea proposed by the government in the 2019-20 budget. Following that, the government issued a gazette notification proclaiming a new ‘zero coupon, zero principal’ securities under the Securities Contracts (Regulation) Act of 1956.

The regulations now set the minimum issue size at 1 crore and the minimum application size for subscriptions at 2 lakh. SSE will be a separate part of the existing stock exchanges under the new rules.

Eligibility criteria

Social enterprises eligible to participate in the SSE will be entities—non-profits and for-profit social enterprises—with a primary purpose of social intent and impact. In addition, such desire shall be proved by a focus on eligible social objectives for underserved or underprivileged individuals or regions.

The social entrepreneurs will be required to participate in one of the 16 broad activities identified by the regulator. Eradicating hunger, poverty, malnutrition, and inequality; promoting healthcare, supporting education, employment, and livelihoods; promoting gender equality and empowering women and LGBTQIA+ groups; and supporting social entrepreneurship incubators are all qualifying initiatives.

Corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure, and housing enterprises, with the exception of affordable housing, shall not be eligible for social enterprise designation.

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