SEBI Expands Social Stock Exchange Access for Charitable Entities

The Securities and Exchange Board of India (SEBI) has broadened the definition of Not-for-Profit Organizations (NPOs) eligible to raise funds via the Social Stock Exchange (SSE). With new structures now included, SEBI mandates stricter reporting and assessment requirements to enhance accountability and impact transparency.

The Securities and Exchange Board of India (SEBI) took significant steps on Friday to broaden access to the Social Stock Exchange (SSE) by allowing more charitable entities to raise funds through the platform. This move is a part of the regulator's efforts to widen the definition of Not-for-Profit Organizations (NPOs) authorized to list on the SSE.

Under the expanded framework announced in a recent circular, legal structures including trusts under the Indian Registration Act, 1908, charitable societies under state-specific Societies Registration Acts, and companies formed under section 25 of the old Companies Act, 1956, will now be categorized as NPOs. SEBI has also established new reporting criteria for accountability.

NPOs not listing securities must self-report an Annual Impact Report (AIR) outlining significant yearly activities and the methodology behind their evaluation. SEBI has further stipulated that financial and governance disclosures occur within specific timelines each year. This directive follows SEBI's recent changes to disclosure norms and recognizes a shift towards a broader, profession-agnostic approach to social impact assessment.

(With inputs from agencies.)