Social Stock Exchange to be distinct

MUMBAI: National Stock Exchange of India (NSE) received in-principle approval from the Securities Exchange Board of India (SEBI) on December 19, 2022, to set up a Social Stock Exchange (SSE) as a separate segment of the NSE.

Earlier, finance minister Nirmala Sitharaman, in her Union Budget speech of 2019-20, had proposed creation of a SSE, under the regulatory ambit of SEBI for listing social enterprises and voluntary organisations working for the realisation of a social welfare objective, so that they can raise capital as equity, debt or as units like a mutual fund, as per a release.

Government of India, through gazette notification has declared a new security ‘Zero Coupon Zero Principal’ (ZCZP) under the Securities Contracts (Regulation) Act, 1956. The new instrument ZCZP can be publicly or privately issued by Not for Profit (NPO) upon registering with the SSE segment of NSE to raise funds subject to fulfilment of eligibility criteria.

Currently, the regulations have prescribed the minimum issue size as Rs 1 crore and minimum application size for subscription at Rs 2 lakhs. Subscription to the ZCZP would be like a philanthropic donation, it said.