NSE gets final approval to launch the Social Stock Exchange as a separate unit

The SSE component will provide a new way for social enterprises to fund social initiatives, increase their visibility and bring greater transparency to how social enterprises raise and spend funds.

The National Stock Exchange of India has received final approval from the Securities and Exchange Board of India (Sebi) to launch the Social Securities Exchange (SSE) as a separate division of the NSE.

The exchange previously received approval in principle from Sebi to launch the SSE platform and is awaiting final approval.

SSE will provide a new way for social enterprises to fund social initiatives, increase their visibility and increase transparency in the raising and use of funds by social enterprises. In a statement, the NSE said that any social enterprise, non-profit organization (NPO), or for-profit social enterprise (FPE) can join/register for the SSE board as long as it establishes the primacy of its social intentions.

“For eligible NPOs, the first step for onboarding starts with the registration on the Social Stock Exchange segment. Post registration, NPOs can initiate the fund mobilization process by the issuance of instruments such as Zero Coupon Zero Principal (ZCZP) via a public issue or private placement. Currently, the regulations have prescribed the minimum issue size as ₹1 crore and minimum application size for subscription at ₹2 lakhs for ZCZP issuance,” the circular said.

“For FPE, the process of issue and listing of securities shall be same as applicable for issue and listing of securities under the extant processes of the Exchange (based on eligibility criteria for the Mainboard, SME Platform or innovators growth platform, as applicable in addition to the criteria provided to be eligible as Social Enterprises),” it added.

“To bring in awareness, we have been conducting various events and hand holding Social Enterprises currently at various stages of onboarding on the Exchange. I take this opportunity to request Social Enterprises to get in touch with our teams to understand the mechanism and benefits of registering & listing on the Social Stock Exchange segment,” said NSE MD and CEO, Ashishkumar Chauhan. 

Union Finance Minister Nirmala Sitharaman in her speech on the Union Budget 2019-2020 proposed the creation of an SSE under the purview of Sebi to list social enterprises and voluntary organizations for welfare purposes so that they can raise funds in the form of stocks, debt or units such as mutual funds (MF).

In October last year, the BSE exchange received approval in principle from capital markets regulator SEBI to make the SSE a separate sector.