On Thursday, the Securities and Exchange Board of India (SEBI) revealed the recommendations of a committee set up for proposing norms for listing on a Social Stock Exchange (SSE), an innovative concept for social work announced by the Finance Minister in her budget speech which aims to make fund-raising by organizations working towards eradicating hunger, poverty, malnutrition or promoting health care, sanitation, safe drinking water and education in India easier.

A non-profit organization (NPO) and a for-profit enterprise (FPE) can list themselves on the SSE given that they can prove social intent and impact. The panel, led by Harsh Bhanwala, former Nabard Chairman, recommended keeping out corporate foundations, political or religious activities, professional or trade associations, infrastructure, and housing companies (excluding affordable housing) of the SSE. The fund-raising modes on the SSE include equity, debt, development impact bonds, and social venture funds. It has been suggested to allow development impact bonds and social impact funds, which are also known as social venture funds (SVFs), with 100% grants-in grants-out provision and donations by investors through mutual funds. To boost investor participation in the SVFs, the panel recommended the minimum corpus size for such funds to be reduced from ₹20 crores to ₹5 crores, and the minimum subscription amount from ₹1 crore to ₹2 lakh. The SVF will fall under Category-I Alternative Investment Fund (AIF) allowing 100% grants-in and grants-out. The Technical Group recommended the capacity building fund for SSE to have a corpus of ₹100 crores. This fund should be housed under Nabard. Exchanges and other developmental agencies like SIDBI should be asked to contribute towards this fund. The SEBI panel emphasized disclosures for entities using the SSE mechanism. They will have to come out with social impact reports annually, covering aspects such as strategic intent and planning, approach, and impact scorecard. The report records an extensive set of activities that SSE-listed entities can engage in, based on those identified by NITI Aayog under Sustainable Development Goals.

The list of entities eligible to list on the SSE includes organizations promoting livelihood, gender equality, empowerment of women & LGBT communities, education, employability,  environmental sustainability, addressing climate change, forest and wildlife conservation, protection of national heritage, art and culture, training to promote rural sports, nationally recognized sports, paralympic, sports, and Olympic sports. Also supporting incubators of social enterprises, supporting other platforms strengthening the non-profit ecosystem in fundraising and capacity building, promoting livelihoods for rural and urban poor, including enhancing the income of small and marginal farmers and workers in the non-farm sector. Moreover, Slum area development, affordable housing, and other interventions to build sustainable and resilient cities, disaster management agencies including relief, rehabilitation, and reconstruction also qualify.