{"id":364122,"date":"2026-06-02T15:26:50","date_gmt":"2026-06-02T09:56:50","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=364122"},"modified":"2026-06-02T15:26:50","modified_gmt":"2026-06-02T09:56:50","slug":"zero-coupon-zero-principal-zczp-instrument","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/zero-coupon-zero-principal-zczp-instrument\/","title":{"rendered":"Zero Coupon Zero Principal (ZCZP) Instrument"},"content":{"rendered":"<div class=\"content-box-green\">\n<p style=\"text-align: justify;\"><strong>News:<\/strong> The Ministry of Corporate Affairs (MCA) has enhanced India\u2019s nascent Social Stock Exchange (SSE) ecosystem by allowing companies to use a portion of their Corporate Social Responsibility (CSR) spending through Zero Coupon Zero Principal (ZCZP) instruments.<\/p>\n<\/div>\n<h2 class=\"red-h2-box\" style=\"text-align: justify;\"><strong>About Zero Coupon Zero Principal (ZCZP) Instrument<\/strong><\/h2>\n<figure id=\"attachment_364141\" aria-describedby=\"caption-attachment-364141\" style=\"width: 419px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\" wp-image-364141\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/06\/Source-UN.jpg?resize=419%2C240&#038;ssl=1\" alt=\"Zero Coupon Zero Principal (ZCZP) Instrument\" width=\"419\" height=\"240\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/06\/Source-UN.jpg?resize=300%2C172&amp;ssl=1 300w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/06\/Source-UN.jpg?resize=1024%2C587&amp;ssl=1 1024w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/06\/Source-UN.jpg?resize=768%2C440&amp;ssl=1 768w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/06\/Source-UN.jpg?w=1379&amp;ssl=1 1379w\" sizes=\"auto, (max-width: 419px) 100vw, 419px\" \/><figcaption id=\"caption-attachment-364141\" class=\"wp-caption-text\">Source &#8211; UN<\/figcaption><\/figure>\n<ul style=\"text-align: justify;\">\n<li><strong>Definition:<\/strong> They are <strong>financial instruments<\/strong> or <strong>securities<\/strong> issued by <strong>not-for-profit organisations (NPOs)<\/strong> registered on the<strong> Social Stock Exchange segment<\/strong> of a recognised stock exchange in accordance with regulations framed by the <strong><a href=\"https:\/\/forumias.com\/blog\/securities-and-exchange-board-of-india-sebi\/\">Securities and Exchange Board of India (SEBI)<\/a>.\u00a0<\/strong><\/li>\n<li><strong>Features:<\/strong>\n<ul>\n<li>Such organisations registered on the<strong> Social Stock Exchange segment<\/strong> of a recognised stock exchange <strong>will be permitted to undertake projects with a duration of not more than three succeeding financial years<\/strong> from the date of issuance.<\/li>\n<li>The NPOs registered on a Social Stock <strong>Exchange may also make private issuance of Zero-Coupon Zero-Principal Instruments.<\/strong><\/li>\n<li>In the event of delisting or termination of the instrument, <strong>any unspent amount will have to be transferred to funds specified under the approved list<\/strong> of <a href=\"https:\/\/forumias.com\/blog\/csr-corporate-social-responsibility-in-india-provisions-status-and-challenges\/\">Corporate social responsibility<\/a> (CSR) activities.<\/li>\n<li>It<strong> carries neither interest payments nor repayment of principal,<\/strong> effectively making it a philanthropic funding mechanism routed through a market framework.<\/li>\n<li><strong>Form of issuance:<\/strong> It shall be issued in<strong> dematerialised form only.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Limitations<\/strong>:\n<ul>\n<li><strong>No Independent Impact Assessment Requirement: <\/strong>ZCZP instruments are<strong> exempt from independent impact assessments.<\/strong> The exemption is based on the assumption that SSE disclosure requirements provide adequate transparency.\n<ul>\n<li>However, <strong>listing on the SSE does not necessarily guarantee independent verification of social impact,<\/strong> which may concern company boards seeking greater assurance.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Limited Supply of Credible Listed Non-Profits: <\/strong>The <strong>number of reputable non-profit organisations currently listed on the Social Stock Exchange is relatively small.<\/strong>\n<ul>\n<li>This raises concerns about whether there will be enough high-quality ZCZP issuances to meet the increased demand generated by the new CSR framework.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>About the Amendment:\u00a0<\/strong>\n<ul>\n<li><strong>Ministry of Corporate Affairs (MCA)<\/strong> has facilitated Corporate Social Responsibility (CSR) through Zero Coupon Zero Principal Instrument by expanding the scope of <strong>Schedule VII of the Companies Act, 2013.<\/strong>\n<ul>\n<li>Also, to facilitate the<strong> implementation Corporate Social Responsibility (CSR) through Zero Coupon Zero Principal Instrument,<\/strong> amendments to the<strong> CSR Policy Rules, 2014 have been made.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Aim:<\/strong> This amendment is aimed at providing significant <strong>ease of compliance to the companies <\/strong>and will also <strong>help Not-for-Profit Organisations (NPOs) to raise funding for public welfare projects<\/strong> in a transparent and regulated manner.<\/li>\n<li><strong>Limits:<\/strong> Expenditure incurred by the CSR-mandated companies for such instruments shall not <strong>exceed ten per cent of the total Corporate Social Responsibility expenditure for that financial year<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\">\n<h2 class=\"red-h2-box\"><strong>About Social Stock Exchange (SSE)<\/strong><\/h2>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/static.toiimg.com\/thumb\/msid-120135111%2Cimgsize-81566%2Cwidth-400%2Cheight-225%2Cresizemode-72\/mp-to-float-social-impact-bonds-via-nse-in-three-months.jpg?w=750&#038;ssl=1\" alt=\"MP to float social impact bonds via NSE in three months\" \/><\/p>\n<ul>\n<li>Social Stock Exchange (SSE) is a <strong>separate segment of the existing Stock Exchange<\/strong> that <strong>helps Social Enterprises to raise funds from the public through the stock exchange mechanism.<\/strong><\/li>\n<li>SSE identifies the <strong>two forms of social enterprises<\/strong> that are engaging in the activity of creating positive social impact and that meet the primacy of their social intent.\n<ul>\n<li>Not-for-profit organization<\/li>\n<li>For-profit social enterprise<\/li>\n<\/ul>\n<\/li>\n<li>SSE acts <strong>as a medium between Social Enterprises and fund providers,<\/strong> and that can help them to select those entities that are creating measurable social impact and reporting such impact.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>News: The Ministry of Corporate Affairs (MCA) has enhanced India\u2019s nascent Social Stock Exchange (SSE) ecosystem by allowing companies to use a portion of their Corporate Social Responsibility (CSR) spending through Zero Coupon Zero Principal (ZCZP) instruments. About Zero Coupon Zero Principal (ZCZP) Instrument Definition: They are financial instruments or securities issued by not-for-profit organisations&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/zero-coupon-zero-principal-zczp-instrument\/\">Continue reading <span class=\"screen-reader-text\">Zero Coupon Zero Principal (ZCZP) Instrument<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,11735],"class_list":["post-364122","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-the-hindu-business-line","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/364122","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\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=364122"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/364122\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=364122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=364122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=364122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}