NSE to set up Social Stock Exchange (SSE) as a separate segment

Finance Minister Nirmala Sitharaman, in her Union Budget speech of 2019-20, had proposed creation of a Social Stock Exchange, under the regulatory ambit of SEBI for listing social enterprises and voluntary organizations working for the realization of a social welfare objective, so that they can raise capital as equity, debt or as units like a mutual fund (MF).

The exchange said that the government, 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 Social Stock Exchange segment of NSE to raise funds subject to fulfilment of eligibility criteria. Currently the regulations have prescribed the minimum issue size as ₹1 crore and minimum application size for subscription at ₹2 lakhs. Subscription to the ZCZP would be like a philanthropic donation,” it added.

“NSE has always played a pivotal role in capital formation for the country. We are working towards the launch of Social Stock Exchange as a segment on NSE. We believe this platform will immensely benefit the social enterprises contributing to the Sustainable Development Goals,” said Ashishkumar Chauhan, MD & CEO, NSE.

In October, stock exchange BSE got an in-principle nod from the capital market regulator SEBI for the social stock exchange as a separate segment.