Social Stock Exchange in India

Table of Contents

About Social Stock Exchange 2022

A Social Stock Exchange Meaning is to serve the private and non-profit sectors by helping them to raise capital.

Working:

Listing: For-profit and not-for-profit social enterprises can be listed on the Social Stock Exchange. They will be regulated by SEBI.

Issuing Bonds: Not-for-profit entities will be eligible to directly issue zero-coupon or zero-principal bonds, social/development impact funds or mutual funds, through the platform.

For-Profit entities may raise funds through equity, debt, development impact bonds, or social venture funds.

Eligibility: For being eligible to be listed on Social Stock Exchange in India, a social enterprise has to be engaged in a social activity out of several broad activities. They include:

Eradicating hunger, poverty, malnutrition and inequality;

Sustainable and resilient cities, including slum development;

Promoting Healthcare;

Supporting education, employability and livelihoods;

Gender equality and empowerment of women and LGBTQIA communities;

Environment sustainability;

Supporting incubators of social enterprise.

Non-eligibility: A social enterprise does not include corporate foundations, political or religious groups, professional or trade associations, infrastructure companies, except affordable housing.

Additional Requirements: Eventhough both for-profit and not-for-profit social enterprises will be eligible to participate in the SSE, for-profit enterprises have additional reporting requirements.

Benefits of Social Stock Exchange News

Accessing funds: Social enterprises can access funds from donors, philanthropic foundations and corporate social responsibility (CSR) spenders using SSE.
Better utilization of funds: Social Stock Exchange helps in utilistion of funds in an organized way. There will be track of spending by the entity.
Greater visibility: Smaller social enterprises will be able raise funds through SSE. This would not be possible through conventional way.

Concerns with Social Stock Exchange in India

Misuse of funds: There is a possibility of misuse and diversion of funds for purposes other than social causes.
Lack of financial resources: Social enterprises may not possess the expertise or funds to maintain financial records of their transaction.
Assessing impact of funds: There is no mechanism in place that can assess the social impact of the funds raised on SSE.

Bombay Stock Exchange (BSE)

The BSE is the oldest stock exchange in Asia and the 10th oldest in the world. It was established by cotton merchant Premchand Roychand in 1875.
Based on market capitalization, it is the 8th largest stock exchange in the world. The BSE was recognised by the Indian Government under the Securities Contracts Regulation Act in 1957.
BSE SENSEX is the market-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange.

Social Stock Exchange SEBI

SEBI is a statutory body, responsible for regulating securities and commodity market in India. It comes under Ministry of Finance, Government of India. It derives powers from the SEBI Act, 1992.
SEBI has quasi-legislative, quasi-judicial and quasi-executive powers.