Allowing non-profit organisations to list on social stock exchanges recommended
Part of: GS-Prelims and GS-II – Statutory bodies & GS-III – Economy
- A working group constituted by the Securities and Exchange Board of India (SEBI) on social stock exchanges (SSE) has recommended allowing non-profit organisations to directly list on such platforms along with certain tax incentives to encourage participation on the platform.
- The idea of a SSE for listing of social enterprise and voluntary organisations was mooted by the Indian Finance Minister during the Union Budget 2019-20.
- Direct listing for non-profit organisations through issuance of bonds.
- A range of funding avenues, including some of the existing mechanisms such as Social Venture Funds (SVFs) under Alternative Investment Funds (AIFs).
- A new minimum reporting standard for organisations that raise funds on social stock exchanges.
- Allowing for-profit social enterprises to list on the platform but with enhanced reporting requirements.
- SSE can be housed within the existing Exchanges like the Bombay Stock Exchange and the National Stock Exchange.
Important value additions
The Securities and Exchange Board of India (SEBI)
- It is the regulator of the securities and commodity market in India owned by the Government of India.
- It was established in 1988 and given statutory status through the SEBI Act, 1992.
- SEBI is responsible to the needs of three groups:
- Issuers of securities
- Market intermediaries
- Quasi-legislative – drafts regulations
- Quasi-judicial – passes rulings and orders
- Quasi-executive – conducts investigation and enforcement action
- To approve by−laws of Securities exchanges.
- To require the Securities exchange to amend their by−laws.
- Inspect the books of accounts and call for periodical returns from recognised Securities exchanges.
- Inspect the books of accounts of financial intermediaries.
- Compel certain companies to list their shares in one or more Securities exchanges.
- Registration of Brokers and sub-brokers