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Social Stock Exchange (SSE)

Current Affairs

  • 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:

  1. 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.
  2. 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.
  3. Find the list of major stock exchanges in India by visiting the linked article.
  4. 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.

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