Allowing non-profit organisations to list on social stock exchanges recommended 

Allowing non-profit organisations to list on social stock exchanges recommended 

Part of: GS-Prelims and GS-II – Statutory bodies & GS-III – Economy

In News:

• 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.

Keytakeaways  

• 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.
• Recommendations:
  • 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
  • Investors
  • Market intermediaries
• Functions: 
  • Quasi-legislative – drafts regulations 
  • Quasi-judicial – passes rulings and orders 
  • Quasi-executive – conducts investigation and enforcement action 
• Powers:
  • 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