Framework on Social Stock Exchange
Summary
SEBI amends the Social Stock Exchange framework to update NPO registration requirements and introduce procedures for Zero Coupon Zero Principal Instruments. The amendments mandate specific tax exemption validations, disclosure of pending notices, and detailed social impact metrics for NPOs seeking SSE registration. New sub-paragraphs establish issuance norms including dematerialization, transfer restrictions, minimum sizes, and subscription thresholds for these instruments.
Text
Registration Certificate under section 12A/12AA/12AB/10(23C)/10(46) must be valid for at least the next 12 months; details of pending notices or scrutiny cases shall be disclosed at application; fines or penalties imposed shall be disclosed as paid or appealed within 7 days.
The Stock Exchanges shall have the right to refuse registration of those applicants if the notices/scrutiny cases are grave and debilitating enough to endanger the registration of the NPO under the Income-tax Act, 1961 or other relevant laws.
Entity to ensure disclosure whether tax deduction is available or not to investors regarding valid 80G registration under Income Tax Act, 1961 for entities registered under section 12A/12AA/12AB.
The reference of 'Regulation 292K(1)' in the title of sub-paragraph B is substituted by 'Regulation 292K'.
Details of past social impact should highlight trends in key metrics/parameters relevant to the NPO, number of beneficiary, cost per beneficiary and administrative overheads.
The not for profit organization shall file the draft fund raising document with the Social Stock Exchange where it is registered along with the fees as specified by the Social Stock Exchange and an application seeking in-principle approval for listing of its Zero Coupon Zero Principal Instruments.
The draft fund raising document shall be made available on the website of Social Stock Exchange and the Not for Profit Organization for a period of at least 21 days for public comments.
The Social Stock Exchange shall provide its observation on the draft fund raising document to the not for profit organization within a time period of 30 days from the filing of the draft fund raising document or receipt of clarification, whichever is later.
The not for profit organization shall incorporate the observations of the Social Stock Exchange in draft fund raising document and file the final fund raising document to Social Stock Exchange prior to opening the issue.
The draft fund raising document and the final fund raising document shall contain all material disclosures which are true and adequate to enable the applicants to take an informed decision.
The draft fund raising document and the final fund raising document shall contain disclosures as may be specified by the Board from time to time; the Social Stock Exchange may mandate additional disclosures.
Zero Coupon Zero Principal Instruments shall be issued in dematerialized form only.
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Source: SecMarx — Framework on Social Stock Exchange. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.