National Stock Exchange of India (NSE India) recently received an in-principle approval from the Securities Exchange Board of India (SEBI) to set-up SSE as a separate segment.
What is ‘social stock exchange’?
- SSE is a novel idea in India, and a stock exchange of this kind is intended to benefit the private and non-profit sectors by directing more capital to them.
- During her Budget speech for the fiscal year 2019–20, Finance Minister first proposed the concept of SSE. The Securities Contracts (Regulation) Act, 1956 was then invoked by the government, which subsequently published a gazette notification announcing a new security as “zero coupon zero principal”.
- The SSE will function as a distinct division of the current stock exchanges under the new regulations.
Who can list on SSE?
- Not-for-profit organisations (NPOs) and for-profit social enterprises with social intent and impact as their primary goal will be eligible to participate in the SSE.
- 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
- supporting incubators of social enterprise.
- Corporate foundations, political or religious organisations or activities, professional or trade associations, infrastructure companies, and housing companies, with the exception of affordable housing, will not be eligible to be identified as social enterprises.
- According to SEBI’s framework, minimum issue size of ₹1 crore and a minimum application size for subscription of ₹2 lakh are currently required for SSE.