NSE to set up Social Stock Exchange as a separate segment
National Stock Exchange of India (NSE) said it has received in-principle approval from the Securities Exchange Board of India (SEBI) to set up a Social Stock Exchange (SSE) as a separate segment of the NSE.
Union Finance Minister Nirmala Sitharaman, in her Union Budget speech of 2019-20, had proposed the creation of a Social Stock Exchange, under the regulatory ambit of SEBI, for listing social enterprises and voluntary organisations working for the realisation of a social welfare objective, so that they can raise capital as equity, debt or as units like a mutual fund.
Government of India, 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 lakh. Subscription to the ZCZP would be like a philanthropic donation, NSE said in a statement.
Ashishkumar Chauhan, MD & CEO, NSE said, “We believe this platform will immensely benefit the social enterprises contributing to the Sustainable Development Goals.”