SEBI’s Overhaul of Social Stock Exchange

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Sebi social stock exchange

The Securities and Exchange Board of India (SEBI) has started a key transformation in the landscape of finance with the revamping of the Social Stock Exchange (SSE). This overhaul begins with the scrutiny mechanisms and innovative financial instruments, targeted at boost up the transparency and amplifying societal impact. The revamped Social Stock Exchange comes as a pivotal platform, which bridging the gap between capital markets and initiates the social welfare, fostering new place of conscientious investing. In the present article we will explore more about the implications of these reforms and how it effects the Indian financial ecosystem.

Table of Content

Overview on Social Stock Exchange SEBI

Social Stock Exchange India is a specialized and professional platform, where companies represented to social welfare, and the impact can increase capital by the issuance of financial instruments like equity and bonds. It is not same as the traditional social stock exchange; the primary motive is to generate financial returns for investors. A social stock exchange SEBI prioritizes investments, which generate optimistic social or environmental results with the financial returns.

The main objective of Social Stock Exchange is:

  • It offers transparency and accountability to investors about the investment affect;
  • Fostering collaboration between social enterprises, investors, government agencies, and non-profit organizations to address pressing societal issues;
  • It is giving the facility of fundraising for companies working towards the environmental and social consequences;
  • Making a marketplace where investors can allocate capital to assignments aligned with their values and goals.

Significant changes impacting Not-for-profit organizations 

The significant amendment impacting not-for-profit organizations are:

  • Initiate zero coupon zero principal (ZCZP) in instruments: The Social Stock Exchange will now provide innovative financial tools such as ZCZP bonds. These bonds are not provided the regular interest payments and redeemed at maturity for their face value. It is more suitable for social companies, which priorities social effect over financial returns. The new ZCZP structure gives investor eligibility, issuance procedures, and redemption instructions, giving a framework avenue for affect driven funding.
  • Requirement of Social Stock Exchange registration: NPOs looking for increase funds on the Social Stock Exchange will face stricter scrutiny. It must reveal a minimum track record of three years, compliance with compulsory disclosures about the governance and finances; and raised annual income thresholds. Its objective is to make sure only financially and credible sound companies access the Social Stock Exchange.
  • Look on Quantifiable social impact: NPOs must have disclose and explained detail regarding their past social impact. It includes Key performance indicators (KPIs), cost per beneficiary, number of beneficiaries reached, and administrative overheads. This led to transparency in investors decisions, which is depend on actual impact generated.

The revision by SEBIs for the Social Stock Exchange presents an optimistic step towards constructing an effective and robust social investment ecosystem in India. There need to strict registration and look on quantifiable social affect will cause less credible players and boost investor confidence. Initiates the ZCZPs broaden funding selections for social companies, while make sure investor protection by set up instructions.

Future considerations

As we can see revisions are admirable, some areas warrant additional attention. Empower the affect of measurement and verification structure is vital to make sure appropriate reporting and prevent greenwashing. Further, encouraging for investor education and promoting awareness regarding the Social Stock Exchange and its unique characteristic is crucial to attract capital to deserving social businesses.

A Comprehensive guide on Investor Protection Measures of SEBI


In Conclusion, SEBI’s revamp of the Social Stock Exchange presents a bold move towards the financial markets with societal welfare aims. Through executing scrutiny tools and initiates innovative financial mechanisms, empower transparency, accountability and effective investment. As investors are highly prioritize social and environmental considerations, the revamped Social Stock Exchange not only caters to their rising preferences, however, also selected as optimistic change by channeling capital onwards effective introductions. The Legal Window team has clearly explained you about the SEBI’s revamps social stock exchange in rise of scrutiny, along with new instruments boost transparency and effect.

CS Urvashi Jain is an associate member of the Institute of Company Secretaries of India. Her expertise, inter-alia, is in regulatory approvals, licenses, registrations for any organization set up in India. She posse’s good exposure to compliance management system, legal due diligence, drafting and vetting of various legal agreements. She has good command in drafting manuals, blogs, guides, interpretations and providing opinions on the different core areas of companies act, intellectual properties and taxation.

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