Mumbai: The market regulator Sebi on Tuesday decided with a framework for the social stock exchange for the maintenance of funds by social companies.
The framework for Social Securities Exchange (SSE) has been developed on the basis of the recommendations of work groups and technical groups formed by regulators.
After the council meeting on Tuesday, Chairman of the Sebi Ajay Tyagi said that the SSE would be a separate segment of the existing Stock Exchange.
Social Enterprises (SES) who are eligible to participate in SSE must be a non-profit organization (NPO) and non-profit social companies – have social intentions and impact as their main goal.
Also, such intentions must be shown through their focus on social goals that are eligible for population or regions that are less far or less special.
Social companies must be involved in social activities from a list of 15 broad activities approved by SEBI.
When asked about the timeline for SSE, Tyagi said that he could not determine the timeline to exchange and would coordinate with the government to take it.
With regard to fundraising, Sebi said the nop that qualified can raise funds through equity, zero zero bonds, mutual funds, social impact funds, and development impact bonds.
NOS managed to raise funds on SSE will be asked to be registered with the exchange.
Regulators say that social enterprises under the norms of Alternative Investment Funds SBI will be retrieved as a social impact fund.
Also, the corpus requirements for these funds will decrease from RS 20 Crore to Rs 5 Crore.
Next, the reference for “Geded Return” will be deleted.
Sebi said it would make amendments in accordance with the regulatory framework, towards the initial and sustainable disclosure for social companies, which included aspects related to governance, finance and social.
Furthermore, said that social audits would be mandated to raise funds that raised or registered in SSE.
To begin with only a well-known company / institution that has expertise in the Social Audit field will be permitted to conduct social audits that employ social auditors who have fulfilled the certification course conditions carried out by NISAs.
Furthermore, the separate sustainability directory under ICAI will function as SRO for social auditors.
The regulator said it would be involved with Nabard, SidBI and the stock market against the Capacity Development Fund Institution, with the Corps of Rs 100 Crore.
Operationalization of a framework will require amendments to several norms and it will be taken by Sebi, said the regulator.
In May, the Semi panel suggested that the corporate foundation, political and religious organizations, between other entities should not be permitted in SSE.
Social Securities Exchange is a new concept in India and such exchanges are intended to serve providers of private and non-profit sectors by channeling larger capital to them.
The idea of ​​SSE first floated by Minister of Finance Nirmala Sitharaman in the 2019-20 budget speech.