The National Stock Exchange (NSE) which is the leading stock exchange in India has received the final approach from the market controller Sebi to launch a social stock exchange (SSE) as a separate segment on its policy.
The approval was received on 22nd February, the SSE segment will provide new direction for community- oriented organizations to Finance initiatives, provide them clarity and bring in enhanced discernibility in Fund mobilization and utilization by community- oriented organizations.
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Social Stock Exchange
In zero, Sebi introduced the framework for Social Stock Exchange in order to provide social enterprises more direction to raise funds.
Types of Social Enterprises
1. Non- profit organization (NPO)
NPO is a charitable trust that does not seek profit.
2. For- profit social enterprises (FPEs)
This is a firm or corporate body, works for profit.
Non- Profit Organization
- A non- profit organization must be 3 years old.
- The organization need valid income tax certificate.
- The organization must spend a minimum sum of Rs 50 lakh per year and at least Rs 10 lakh of Fund the previous year.
- The NPO raise Funds via issuing implements such as Zero Coupon Zero Principal (ZCZP), donations via mutual funds or many other.
For- profit social enterprises
- The FPEs raise funds via issuing equity shares on the main board such as small and medium sized enterprises platform or developers growth Platform of stock exchange.
- The FPEs who raise funds via issuing equity to an Alternative Investment Fund (AIF), also adds social implications or issue of debt tools.
