Social Stock Exchange – A Marketplace for Philanthropy finally in place with a few final touches remaining

Through a set of amendments to various SEBI Regulations made on 25th July, 2022 followed by a detailed circular dated 19th September, 2022 of SEBI laying down further details, the basic framework of the Social Stock Exchange (“SSE”) is finally in place. This will enable a whole ecosystem/marketplace where the donors and investors having an objective of social benefit will be able to find suitable organizations engaged in the type of social work they are interested in. On the other side, such social organizations (or ‘Social Enterprises’ or SEs, as the SEBI regulations term them) will also be able to find donors and investors.

There are several final touches still remaining, though. The stock exchanges hosting the SSE will need to lay down several requirements, such as information required in offer documents, etc. The framework for Social Auditors and accounting by SEs almost wholly remains to be set up. Then, there are other things, such as tax rebates, CSR-related amendments, etc., that are desirable and would give a boost to this exchange and will need to be considered by lawmakers and other regulators.

Let us, however, first review the concept of SSE, earlier discussed in this feature (July, 2020 BCAJ) when the initial developments took place. Now, that the formal amendments have taken place and the basic legal framework established, the subject is worth reviewing in more de