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The Tax Publishers SEBI--Social Stock Exchange Social Stock Exchange--Overview CA. Deepak Harwani National Stock Exchange (NSE) has recently received final approval from SEBI to set up a Social Stock Exchange (SSE) as a separate segment of the NSE. 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. The Learned Author provides a brief overview of Social Stock Exchange. 1. Introduction The proposal was given by the finance minister in the budget of 2019-20 to introduce Social stock exchange (SSE), as a platform for social enterprises to raise funds from public. Accordingly SEBI constituted working group in September 2019 to make recommendations on possible structure & mechanism of SSE, report of which was uploaded by SEBI for public comments. To attain more clarity on the operational issues & review the recommendations given by working group, another group named as Technical group was constituted by SEBI in September 2020, report of which was uploaded for public comments. Based on the recommendation of Working group & technical group along with public comments, compilation was made & key recommendations were structured accordingly. 2. Concept of SSE Social stock exchange is a another segment of existing stock exchange to help social enterprises to raise funds from public by acting as a medium between social enterprises & fund providers. Social enterprises such as NPOs willing to raise money can register on SSE for raising funds. However once such enterprise is registered it has to make mandatory disclosures, as required, irrespective of whether they had raised money or not. 3. Need for SSE The government in order to provide wide range of funding alternative to social enterprise proposed the concept of SSE. The aim behind such proposal was to mitigate economic damage caused by Covid-19 pandemic & build livelihood of the affected people. It was introduced to bridge the funding gap for social enterprises who have lack of understanding on raising funds from banks & FIs. Further, it would also improve visibility & provide clarity on contributions of social enterprises to the economy. 4. Eligibility (i) Eligible entities 1) For profit enterprises (FPE) - It includes companies, Sole proprietorships, partnership firms, HUFs & LLPs. 2) Non Profit Organization (NPOs) - It includes section 8 companies, trust & societies. (ii) Ineligible Entities Corporate foundations funded by parent corporate entity or entities, Political or religious organisations, Professional or trade associations & Infrastructure & Housing Companies ( other than affordable housing companies). 5. Constitution of Working group SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

SEBI--Social Stock Exchange

Social Stock Exchange--Overview

CA. Deepak Harwani

National Stock Exchange (NSE) has recently received final approval from SEBI to set up a Social Stock Exchange (SSE) as a separate segment of the NSE. 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. The Learned Author provides a brief overview of Social Stock Exchange.

1. Introduction

The proposal was given by the finance minister in the budget of 2019-20 to introduce Social stock exchange (SSE), as a platform for social enterprises to raise funds from public. Accordingly SEBI constituted working group in September 2019 to make recommendations on possible structure & mechanism of SSE, report of which was uploaded by SEBI for public comments. To attain more clarity on the operational issues & review the recommendations given by working group, another group named as Technical group was constituted by SEBI in September 2020, report of which was uploaded for public comments. Based on the recommendation of Working group & technical group along with public comments, compilation was made & key recommendations were structured accordingly.

2. Concept of SSE

Social stock exchange is a another segment of existing stock exchange to help social enterprises to raise funds from public by acting as a medium between social enterprises & fund providers. Social enterprises such as NPOs willing to raise money can register on SSE for raising funds. However once such enterprise is registered it has to make mandatory disclosures, as required, irrespective of whether they had raised money or not.

3. Need for SSE

The government in order to provide wide range of funding alternative to social enterprise proposed the concept of SSE. The aim behind such proposal was to mitigate economic damage caused by Covid-19 pandemic & build livelihood of the affected people. It was introduced to bridge the funding gap for social enterprises who have lack of understanding on raising funds from banks & FIs. Further, it would also improve visibility & provide clarity on contributions of social enterprises to the economy.

4. Eligibility

(i) Eligible entities

1) For profit enterprises (FPE) - It includes companies, Sole proprietorships, partnership firms, HUFs & LLPs.

2) Non Profit Organization (NPOs) - It includes section 8 companies, trust & societies.

(ii) Ineligible Entities

Corporate foundations funded by parent corporate entity or entities, Political or religious organisations, Professional or trade associations & Infrastructure & Housing Companies ( other than affordable housing companies).

5. Constitution of Working group