SEBI technical group submits report on “Social Stock Exchanges(SSE)”

Contents

• 1
• 2 What is the News?
• 3  About Social Stock Exchange(SSE):
• 4 Key Recommendations on Social Stock Exchanges:

What is the News?

A technical group on Social Stock Exchanges (SSEs), constituted by the Securities and Exchange Board of India (SEBI) has submitted its report.

 About Social Stock Exchange(SSE):

• Social Stock Exchange(SSE) is a platform that allows investors to invest in select social enterprises or social initiatives.
  • Social Enterprise is a revenue-generating business. The primary aim of social enterprise is to achieve a social objective such as providing healthcare or clean energy.
• Aim: The aim is to help social and voluntary enterprises to raise capital in form of equity or debt or a unit of the mutual fund.
• Global Examples: SSE exists in countries such as Singapore, UK among others. These countries allow firms operating in social sectors to raise risk capital.
• India: The proposal to set up SSEs in the country was first floated during the Union Budget in 2019.
  • In 2019, SEBI constituted a group under the chairmanship of Tata group veteran Ishaat Hussain.
  • In 2020, SEBI again set up the Technical Group(TG) under Harsh Bhanwala, ex-Chairman, NABARD. This time for getting further expert advice and clarity on SSE. That committee submitted its report.

Key Recommendations on Social Stock Exchanges:

• Eligible Entities: The group has said that both for-profit (FP) and not-for-profit organisations(NPO) should be allowed to tap the SSE.
• Parameters: The group has said three parameters for eligibility as Social Enterprises. The parameters are:
  • A Social Enterprise should engage in at least one of the below eligible activities
  • Further, it should target underserved or less privileged population segments or regions
  • Also, a Social Enterprise shall have at least 67% of its activities qualifying as eligible activities to the target population.
• Prohibited Organisations: Political and religious organisations, trade organisations, and corporate foundations should not be allowed to raise funds through SSEs.
• Eligible Activities: Social enterprises can engage in activities such as:
  • Eradicating hunger, poverty, malnutrition and inequality;
  • Promoting health care (including mental health) and sanitation including making available safe drinking water.
  • Activities promoting education, employability and livelihoods.
  • Promoting gender equality, empowerment of women and LGBTQIA+ communities.
  • Ensuring environmental sustainability, addressing climate change (mitigation and adaptation), forest and wildlife conservation.
  • Also, the activities promoting livelihoods for rural and urban poor. This includes enhancing the income of small and marginal farmers and workers in the non-farm sector.
  • Slum area development, affordable housing and other interventions to build sustainable and resilient cities.
• Annual Report: Entities listed on SSE will have to disclose their social impact report on an annual basis. This report should cover aspects such as “strategic intent and planning, approach, impact scorecard”.

Source: Indian Express

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