Note4Students
From UPSC perspective, the following things are important :
Prelims level: Social Stock Exchange (SSE)
Mains level: Not Much
The National Stock Exchange (NSE) has received final approval from the Securities and Exchange Board of India (SEBI) to set up a Social Stock Exchange (SSE) as a separate segment of the NSE.
What is a Social Stock Exchange?
- Social Stock Exchange (SSE) is a platform that connects social enterprises with investors who are looking for social impact along with financial returns.
- Social enterprises are organizations that prioritize social impact over profits.
- SSE aims to provide these organizations with access to capital markets and raise awareness about social investment opportunities.
Who can get listed for SSEs?
- 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.
- Eligible NPOs can begin by registering on the SSE segment.
- After onboarding, NPOs can initiate the fund mobilization 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 the subscription of Rs 2 lakhs for ZCZP issuance.
How will SSE work?
- The SSE will be a separate segment on the NSE, where social enterprises can list their securities.
- These securities will be available for trading to investors who are interested in social impact investing.
- The SSE will also provide a range of services such as capacity building, impact measurement, and reporting to help social enterprises improve their operations and measure their social impact.
Benefits of SSE
- For social enterprises, SSE will provide access to capital markets and help them raise funds for their social projects.
- For investors, SSE will provide a platform to invest in social enterprises and contribute to social impact.
- SSE will also create a transparent marketplace where investors can assess the social impact of their investments.
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