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Social Stock Exchange (SSE) is a separate segment of the existing Stock Exchange, that can help Social Enterprise(s) to raise funds from public through the stock exchange mechanism. SSE will act as a medium between Social Enterprises and fund providers and help them select entities creating measurable social impact and reporting such impact. Certain Social Enterprises (Not-for-profit organizations/NPOs) that meet registration criteria can register on SSE and undertake continuous disclosures on their social impact. Such NPOs may or may not choose to raise funds through SSE, however, would continue to make disclosures including on social impact to stock exchanges.

Retail investors are permitted to invest only in securities offered by For-profit social enterprise under the Main Board. In all other cases, only institutional and non-institutional investors can invest in securities issued by Social Enterprises. As per SEBI (Issue of capital and disclosure requirements) Regulations, 2018: a retail individual investor applies/bids up to two lakhs rupees; non-institutional investor is an investor other than a retail individual investor and qualified institutional buyer.

No. A for profit social enterprise need not register with the Social Stock Exchange before it raises funds through SSE. However, it shall comply with all provisions of ICDR Regulations, AIF Regulations (as applicable) before it can raise funds through SSE.

DIBs (Development Impact Bonds) are one structured finance product available on SSE. Upon completion of a project that meets pre-agreed social metrics at pre-agreed rates, the service provider receives grants from donors (“Outcome Funders”). Since payment is post-facto, the NPO typically raises funds to finance operations (“Risk Funders”), who may earn a small return if metrics are delivered.

It is not mandatory for NPOs registered with SSE to seek listing; however, an NPO shall mandatorily seek registration with a Social Stock Exchange before it raises funds through a Social Stock Exchange. An NPO may register and choose not to raise funds through SSE, and may continue to raise funds through other means.

After registering with SSE, an NPO may raise funds through: i) Issuance of Zero Coupon Zero Principal Instruments (private placement or public issuance), ii) Donations through Mutual Fund Schemes (as specified), iii) Any other means that SEBI may specify in the future.