On 25-07-2022, the Securities and Exchange Board of India has issued SEBI (Issue of Capital and Disclosure Requirements) Third Amendment) Regulations, 2022 to amend the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The amendment inserts a Chapter X-A dealing with Social Stock Exchange (‘SSE’).
Key Points:
- Applicablilty:
- to a Not-for-profit Organization seeking to get registered and raise funds through a SSE.
- To a Not-for-profit Organization seeking to get registered and raise funds through a SSE.
- a For Profit Social Enterprise seeking to be identified as a Social Enterprise under the provisions of this Chapter.
- SSE will be accessible only to institutional investors and non-institutional investors.
- Every SSE will constitute a Social Stock Exchange Governing Council to have an oversight on its functioning.
- This chapter also covers the eligibility conditions for being identified as a Social Enterprise.
- A Not-for-Profit Organization must mandatorily seek registration with a SSE before it raises funds through a SSE.
- Other features covered under this chapter are:
- Fund raising by social enterprise;
- Ineligibility for raising of funds;
- Issuance of Zero Coupon Zero Principal Instruments;
- Eligibility for issuance of Zero Coupon Zero Principal Instruments;
- Procedure for public issuance of Zero Coupon Zero Principal Instruments by a Not-for-Profit Organization;
- Procedure for private issuance of Zero Coupon Zero Principal Instruments by a Not-for-Profit Organization;
- Contents of the fund-raising document;
- Deemed compliance with Securities Contracts (Regulation) Rules, 1957;
- Termination of listing of Zero Coupon Zero Principal Instruments from the Social Stock Exchange.