SEBI proposed review of Framework for Social Stock Exchange
SEBI recently released a consultation paper proposing various changes to the social stock exchange framework, including expanding the definition of activities that can raise funds through the exchange and the list of legal structures that can be permitted to be recognised as a Not for Profit Organisation (NPO) under the SEBI (Issue of Capital and Disclosure Requirements) (ICDR) Regulations. Proposed list of eligible activities to be identified as a social enterprise to include vocational skills, protection and care of domestic and vulnerable animals and protecting heritage located in remote geographies.
The paper also suggested including the following to expand the definition of social enterprise-
- To include welfare of disadvantaged children, women, destitute, elderly and the disabled under eligible activities.
- To include vocational skills under eligible activities.
- To reword Regulation 292E(2)(a)(5) to “Sustaining and stewarding natural ecosystem and environment, pollution control, addressing climate change, conserving forest and wildlife, welfare of vulnerable animals, and education and awareness on sustainable lifestyle” under eligible activities.
- To include promotion and education of art, culture and heritage and include all heritage instead of only national heritage under eligible activities.
- To reword the existing provision “training to” to “promoting” in respect of activities such as rural sports, nationally recognised sports, Paralympic sports and Olympic sports.
The paper further suggested expanding the list of legal structures permissible to be recognized as NPOs under ICDR Regulations and to include the following:
- Trusts registered under Indian Registration Act, 1908 with relevant sub-registrar (in states that do not have a Trusts Act).
- Charitable society registered under the society registration statute of the relevant state.
- Companies registered under Section 25 of the Companies Act, 1956.
The other suggestions include changing the definition of the social impact assessment firm and the requirements of this entity and modifications to target segment to be identified as social enterprise.
Public comments may be submitted by 10th February, 2025.
