SEBI Circular on framework on Social Stock Exchange – 19th September, 2022

SEBI, vide its circular dated 19 th September, 2022 came out with framework on Social Stock exchange specifying minimum requirements to be met by a Not for Profit Organization for registration with SSE in terms of Regulation 292F of the ICDR Regulations. This circular is applicable to all Recognized Stock exchanges, Recognized Depositories, Merchant Bankers and Brokers registered with SEBI, Social Enterprises, Social Impact Fund Registered with SEBI and Social Audit Firms of Chartered Accountants of India.

Minimum requirements to be met by a Not for Profit Organization (NPO) for registration with SSE in terms of Regulation 292F of the ICDR Regulations Broad Parameter Indicator Details Legal Requirements Entity is registered as an NPO Registration certificate valid at least for next 12 months at the time of seeking registration with SSE Entities must be registered in India as one of the below: a. a charitable trust registered under the public trust statue of the relevant state; b. a charitable trust registered under the Societies Registration Act, 1860 c. a charitable trust registered under the Indian Trusts Act, 1882 d. a company incorporated under section 8 of the Companies Act, 2013 Disclose if NPO is owned and/or controlled by government or private Governing document (MoA & AoA/ Trust Deed/ Bye-laws/ Constitution) Disclose if NPO is owned and/or controlled by government or private Exemption under Income Tax Act Registration Certificate under section 12A/12AA/12AB under Income Tax Act, 1961 Registration Certificate under section 12A/12AA/12AB to be valid for at least the next 12 months. Does not have a notice or ongoing scrutiny by Income Tax. Registration with Income Tax as an NPO IT PAN Valid IT PAN Age of the NPO Registration certificate Minimum 3 years Deduction under Income Tax Act, 1960 Valid 80G registration under Income Tax Act, 1961. Entity to ensure whether tax deduction is available or not to investors. Eligible to be Social Enterprise Requirements with Regulation 292E of ICDR Regulations As may be specified by SSE Minimum Fund Flows Annual Spending in the past financial year Receipts or Payments from Audited accounts/ Fund Flow Statement Must be at least Rs. 50 lakhs Funding in the past financial year Receipts from Audited accounts/ Fund Flow Statement Must be at least Rs. 10 lakhs

B. Minimum Initial Disclosure Requirement for NPOs raising funds through the issuance of Zero Coupon Zero Principal Instruments in te