Social Stock Exchange (SSE) -India

 On 19 September 2022, SEBI vide a circular No. SEBI/HO/CFD/PoD-1/P/CIR/2022/120 (the Framework), issued a detailed framework prescribing the minimum requirements to be followed by an Not for Profit Organisation (NPO) that desires to be registered/listed on an SSE. The main themes of the Framework are depicted below:

• Registration of a Not for Profit Organisation (NPO)
• Disclosure to be provided by NPOs for raising funds through the issuance of Zero Coupon Zero Principal (ZCZP) Instruments
• Annual disclosures to be provided by an NPOs 
• Disclosures forming part of the Annual Impact Report (AIR) submitted by Social Enterprises (SEs). 
• The circular also prescribes the time limit for submission of statement of utilisation of funds by an NPO.

Access the documet:

https://www.sebi.gov.in/legal/circulars/sep-2022/framework-on-social-stock-exchange_63053.html

No CROWD in Crowd funding proposal of SEBI

The 60 page document is well written , they are aware of the criticism that there is no crowd in crowd funding and  raise the question -  is it premature to come with a regulation now. My answer is yes. Koreans and Chinese are not rushing with any rule book, they probably want the system to evolve and capture the learning.
First , why crowd funding? We need crowd of retail investors to support startups because we need crowd of early adopters for our innovations.
How to increase the base of investors? Two suggestions:
1. Give a push to investment in startups by large profit making companies under CSR. The law is in place but trickle is yet to begin.
2. Give tax incentives to individual tax payers to support startups by way of donation/ loan/ equity etc within the existing exemption limit.

Let us experiment, learn and freeze.