{"id":130537,"date":"2021-09-01T20:11:24","date_gmt":"2021-09-01T14:41:24","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=130537"},"modified":"2021-09-03T08:59:11","modified_gmt":"2021-09-03T03:29:11","slug":"social-stock-exchanges-a-chance-to-invest-into-our-future","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/social-stock-exchanges-a-chance-to-invest-into-our-future\/","title":{"rendered":"Social Stock Exchanges: A Chance to Invest into Our Future"},"content":{"rendered":"\n<p><strong>Source<\/strong>: This post is based on the article \u201c<strong>Social Stock Exchanges: A Chance to Invest into Our Future<\/strong>\u201d published in Livemint on 1st September 2021.<\/p>\n<p><strong>Relevance<\/strong>: Social Stock Exchange<\/p>\n<p><strong>Synopsis<\/strong>: The concept of a Social Stock Exchange is a worthy idea, but still needs deliberation and consultations with all stakeholders.<\/p>\n<h5><strong>Context<\/strong><\/h5>\n<p>The <strong>Securities and Exchange Board of India (SEBI)<\/strong> constituted a 15-member <strong>working group<\/strong> on a social stock exchange (SSE) in September 2019.<\/p>\n<h5><strong>Need for a Social Stock Exchange<\/strong><\/h5>\n<ol>\n<li>To <strong>enable Non-Profit Organizations to raise money<\/strong> from the market by registering and listing on the SSE.<\/li>\n<li>It would <strong>enable the use of market instruments<\/strong> for investing in social endeavors.<\/li>\n<li>The SSE would boost both <strong>corporate and individual investments in social and ecological projects<\/strong>.<\/li>\n<\/ol>\n<h5><strong>Proposals by the working group<\/strong><\/h5>\n<ul>\n<li><strong>First, <\/strong>the working group has proposed that <strong>first-time retail investors be allowed to avail of a 100% tax exemption<\/strong> on a maximum investment of \u20b91 lakh in an SSE mutual fund.<\/li>\n<li><strong>Second<\/strong>, it has proposed <strong>doing away with the 10% cap on income eligible<\/strong> <strong>for deduction<\/strong> for donations to NPOs that benefit from the SSE.<\/li>\n<li><strong>Third<\/strong>, the SSE is also meant to <strong>aid for-profit social enterprises (FPEs)<\/strong>. The working group has <strong>not defined an FPE, and<\/strong>\u00a0it has left it to enterprises to choose whether they want to be categorised as a social enterprise and consequently commit to additional reporting on social impact.<\/li>\n<li><strong>Fourth<\/strong>, the SSE technical group notes that an <strong>FPE can list on the stock exchange<\/strong> provided it is a company registered under the <strong>Companies Act 1956\/2013<\/strong>.<\/li>\n<li>Lastly, to enhance transparency the working group\u2019s proposals ask that NPOs furnish <strong>more rigorous assessments of the social impact and<\/strong> shift towards <strong>outcomes-oriented measurement<\/strong>. It also places emphasis on the role of <strong>social auditors for independent verification<\/strong>.<\/li>\n<\/ul>\n<h5><strong>Issues\/concerns<\/strong><\/h5>\n<ol>\n<li>First, since the working group has proposed a <strong>five-year tax holiday<\/strong> for FPEs listed on the SSE, it could be <strong>potentially misused<\/strong> and used as a <strong>tax-saving vehicle<\/strong>.<\/li>\n<li>Second, the SSE seeks to give the NPO sector <strong>transparency by mandating increased reporting<\/strong>. However, it leaves out smaller NPOs from the SSE\u2019s ambit.<\/li>\n<li>Third, it also <strong>risks alienating organizations<\/strong> whose or impact may not be amenable to adequate data capture<strong>. <\/strong>For instance, NPOs involved in <strong>environmental justice and digital rights<\/strong> where the existing systems and processes are stacked against them.<\/li>\n<li>Fourth, the SSE technical group <strong>lays down protocols for social auditors,<\/strong> but the worry is that <strong>middlemen agencies might emerge<\/strong>. They may gain unchecked influence over the SSE-NPO-donor ecosystem due to lack of checks and balances.<\/li>\n<\/ol>\n<p><strong>Conclusion<\/strong><\/p>\n<p>Fund-raisers such as social stock exchanges that go beyond a narrow set of quickly measurable outcomes need a proper plan.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: This post is based on the article \u201cSocial Stock Exchanges: A Chance to Invest into Our Future\u201d published in Livemint on 1st September 2021. Relevance: Social Stock Exchange Synopsis: The concept of a Social Stock Exchange is a worthy idea, but still needs deliberation and consultations with all stakeholders. Context The Securities and Exchange&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/social-stock-exchanges-a-chance-to-invest-into-our-future\/\">Continue reading <span class=\"screen-reader-text\">Social Stock Exchanges: A Chance to Invest into Our Future<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8254,216,3658,9470],"class_list":["post-130537","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-financial-market","tag-gs-paper-3","tag-social-stock-exchange","tag-stock-exchange","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/130537","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=130537"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/130537\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=130537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=130537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=130537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}