SEBI introduces Social Stock Exchange: A platform for NGOs

On 23rd August, the National Stock Exchange(NSE) and Bombay Stock Exchange (BSE) set up a platform called the Social Stock Exchange(SSE). The SSE is a platform where non-profit organisations can raise funds from the public. The major distinction between SSE and the normal stock exchange is that investors cannot trade or earn returns. The receiver will treat the money raised through this platform as a donation. All non-profit organisations must register with either of the exchanges to raise the funds. Currently, 31 NPOs have been registered under both the exchanges. SEBI has asked for suggestions from the public till September 19 to improve the platform access by the NPOs. 

Recently,  Securities and Exchange Board of India (SEBI) has proposed to slash the minimum issue size for NPOs from Rs 1 crore to Rs 50 lakh and the minimum application size to Rs 10 thousand from Rs 2 lakh. Moreover, the regulator put the recommendation of the Social Security Exchange Advisory Committee(SSEAC) to ease the overall process of fundraising by the NPOs. Further, NPOs will have a better reach to showcase their work and gain visibility, adding to its transparency in fund mobilisation and utilisation. Here, NPOs include only those organisations not dependent on corporates for more than 50% of their funding. The organisation can raise funds by issuing Zero Coupon Zero Principal(ZCZP) instruments privately or publicly. ZCZP differs from normal bonds as the instrument includes non-payment of coupon or principal amount at the time of maturity.

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