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.
