SOCIAL STOCK EXCHANGE
“Social Stock Exchange” means a separate segment of a recognized stock exchange having nationwide trading terminals. Permitted to register Not for Profit Organizations and/or list the securities issued by Not for Profit Organizations in accordance with provisions of SEBI (ICDR) Regulation 2018.
“Social enterprise” means either a not for profit organization or a for profit social enterprise that meets the eligibility criteria specified in SEBI (ICDR) Regulation 2018.
Eligibility for SSE:
The Social Enterprise shall have at least 67% of its activities, qualifying as eligible activities to the target population, to be established through one or more of the following:
(i) At least 67% of the immediately preceding 3-year average of revenues comes from providing eligible activities to members of the target population;
(ii) At least 67% of the immediately preceding 3-year average of expenditure has been incurred for providing eligible activities to members of the target population;
(iii) Members of the target population to whom the eligible activities have been provided constitute at least 67% of the immediately preceding 3-year average of the total customer base and/or total number of beneficiaries.
Corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure and housing companies, except affordable housing, shall not be eligible to be identified as a Social Enterprise
The Social Enterprise shall be indulged in at least one of the following activities:
A) Eradicating hunger, poverty, malnutrition and inequality;
B) Promoting health care including mental healthcare, sanitation and making available safe drinking water;
C) Promoting education, employability and livelihoods;
D) Promoting gender equality, empowerment of women and LGBTQIA+ communities;
E) Ensuring environmental sustainability, addressing climate change including mitigation and adaptation, forest and wildlife conservation;
F) Protection of national heritage, art and culture;
G) Training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports;
H) Supporting incubators of Social Enterprises
I) Supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building;
J) Promoting livelihoods for rural and urban poor including enhancing income of small and marginal farmers and workers in the non-farm sector;
K) Slum area development, affordable housing and other interventions to build sustainable and resilient cities;
L) Disaster management, including relief, rehabilitation and reconstruction activities;
M) Promotion of financial inclusion;
N) Facilitating access to land and property assets for disadvantaged communities;
O) Bridging the digital divide in internet and mobile phone access, addressing issues of misinformation and data protection;
P) Promoting welfare of migrants and displaced persons;
Q) Any other area as identified by the Board or Government of India from time to time
A Social Enterprise may raise funds through following means:
Not for profit organization may raise funds on a social stock exchange through:
Issuance of zero coupon zero principal instruments to eligible investors in accordance with the applicable provisions of this chapter;
Donations through mutual fund schemes as specified by the board;
Any other means as specified by the board from time to time.
For profit social enterprise may raise funds through:
Issuance of equity shares on the main board, SME platform or innovators growth platform or equity shares issued to an alternative investment fund including a social impact fund;
Issuance of debt securities;
Any other means as specified by the board from time to time
A Social Enterprise shall not be eligible to register or raise funds through a Social Stock Exchange or Stock Exchange, as the case may be:
(a) if the Social Enterprise, any of its promoters, promoter group or directors or selling shareholders or trustees are debarred from accessing the securities market by the Board;
b) if any of the promoters or directors or trustees of the Social Enterprise is a promoter or director of any other company or Social Enterprise which has been debarred from accessing the securities market by the Board;
(c) if the Social Enterprise or any of its promoters or directors or trustees is a wilful defaulter or a fraudulent borrower
(d) if any of its promoters or directors or trustees is a fugitive economic offender;
(e) if the Social Enterprise or any of its promoters or directors or trustees has been debarred from carrying out its activities or raising funds by the Ministry of Home Affairs or any other ministry of the
Central Government or State Government or Charitable Commissioner or any other statutory body
Eligibility for registration for NGOs:
Must be operational for ≥ 3 years, with minimum ₹10 lakhs in the last 3 years towards achieving its objectives (Excludes administrative expenditure).
Newly formed NGOs can apply for Prior Permission (project-specific foreign funds).
Valid certificate u/s 12A/12AA/12AB of the Income Tax Act, valid 80G registration
The registration of NPO on the NGO Darpan portal is mandatorily required for registering it on Social Stock Exchange.
Only Indian entities can register in Social Stock Exchange
Registration & Permissions Two routes:
Permanent Registration (valid for 5 years) — renew 6 months before expiry.
Prior Permission for new NGOs or one-time foreign donations.
Mandatory submission of Aadhaar, DARPAN ID, audited financials, and governing body details.
Fundraising:
Minimum Funding Requirement:
The minimum Issue Size for raising funds on SSE is INR 50 lakhs and above.
Fundraising Document (FRD):
Your organization needs to submit an FRD, which is a detailed proposal of your project, to start the listing and fundraising process.
Initial Approval:
Upon satisfying SSE’s criteria with your FRD, you’ll receive an in-principle approval valid for 6months.
Public Funding Campaign:
Within the approval period of 6 months, you should initiate a public issue for a time period of 3 to 10 days, inviting investors to fund your project.
Subscription Goal:
Your organization has to raise at least 75% of your issue size as stated in the FRD for a successful listing. For example, if you’re seeking INR 1crore, you need to raise at least INR 75 lakhs.
Refund Policy:
In case of an oversubscription, in any of the categories, the allotment may be made on proportionate basis or first come first serve basis or such other method as may be disclosed in the fund-raising document.