- In June 2020, a panel constituted by the Securities and Exchange Board of India recommended that non-profit organizations be directly included in the Social Stock Exchanges.
- In the wake of the economic downturn brought about by the COVID-19 pandemic, this was seen as a welcome move to ease some of the difficulties faced by the populace at large.
Benefits of Social Stock Exchange:-
Building an ecosystem that will enable the SSE to thrive and flourish in India will give the following benefits:
- Social impact reporting: Common minimum standards for reporting on social impact have been suggested for both classifications (FPEs and NPOs), to reduce information asymmetry. The working group also suggests operating a “capacity building fund” for enhancing reporting capabilities by NPOs. Over time, it is also envisaged that a new category of auditors—social auditors—will perform independent verification of NPOs’ impact reporting.
- Tax benefits: To increase the reception of these funding models amongst various classes of investors, the committee has also recommended several tax exemptions, benefits, and other supportive regulatory clarifications.
- Find the list of major stock exchanges in India by visiting the linked article.
- Rigorous regulatory scrutiny: Listing of FPEs on the SSE must not be based only on self-reporting social impact. To ensure that only bonafide FPEs are able to associate with SSE, SEBI, in consultation with the existing specialist entities, should work out a mechanism for assessing the credentials of the social impact dimensions self-declared by the FPEs.