Sebi Slashes Minimum Investment for Social Stock Exchange Instruments to Boost Participation

Sebi has reduced the minimum investment for Zero Coupon Zero Principal instruments on the Social Stock Exchange from Rs 10,000 to Rs 1,000, aiming to increase retail participation. This decision is expected to encourage small investors to fund social enterprises in sectors such as education and healthcare.

The Securities and Exchange Board of India (Sebi) announced a significant reduction in the minimum investment required for Zero Coupon Zero Principal (ZCZP) instruments on the Social Stock Exchange (SSE). The new threshold, now Rs 1,000, down from the previous Rs 10,000, aims to make these social impact investments more accessible to retail investors.

This decision followed recommendations from the Social Stock Exchange Advisory Committee and public feedback. The adjustments alter the provisions of a September 2022 circular and will take effect immediately, as per Sebi's latest directive. The move is expected to channel more funds to non-profit organizations in fields such as education and healthcare by encouraging smaller investments.

The introduction of SSE as a new segment within existing stock exchanges is meant to serve as a platform for both private and non-profit providers. Conceptualized by Finance Minister Nirmala Sitharaman in her 2019-20 Union Budget speech, it aims to funnel capital towards social enterprises, bolstering their funding and growth while maintaining stringent impact and financial reporting standards.

(With inputs from agencies.)