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SEBI Governing Council for Social Stock Exchange

SEBI Governing Council for Social Stock Exchange

The Social Stock Exchange (SSE) enables the listing of Non-profit organisations on the stock exchanges. It allows the social enterprises to raise funds for undertaking the activities of social objectives. The process of listing NPOs on the stock exchanges helps them raise funds by offering ZERO coupons Zero Principal Bonds, Mutual Funds and Social Venture Funds on the stock exchanges. The social enterprises working to eradicate hunger and poverty, promote healthcare, support education, gender equality, and environmental sustainability, and support incubators of social enterprises etc., are entitled to register themselves at the SSE.  

Henceforth, to provide a better opportunity for social enterprises and maintain transparency in the functioning of the SSE, the SEBI issued a “Framework on Social Stock Exchange” on 19th September 2022. The said framework provided that there shall be a governing body that will look after the functioning, its composition, etc. In pursuance of this, the SEBI issued a detailed circular, “Governing Council for Social Stock Exchange“, on 13th October 2022.

Legislative framework for Governing Council of Social Stock Exchange

The SEBI[1] (Issue of Capital and Disclosure Requirements) Regulations 2018 under Regulation 292D states that a governing council for SSE will be responsible for its functioning. Further, the board shall specify the composition and terms of its references from time to time.

What is the Composition of the Social Stock Exchange?

The circular states that the Governing Council shall comprise individuals who can contribute to the development of the SSE.

Relevant Experience: The individuals working in the governing council of the SSE shall possess the relevant experience and have received representations from various categories of stakeholders enlisted below:

  1. Philanthropic and Social Sectors ( including, Public or Private Sector Donors)
  2. Information Repositories
  3. Social Impact Investors
  4. Non-profit Organisations
  5. Social Audit Profession
  6. Self-Regulatory Organisation for Social Auditors
  7. Stock Exchange
  8. Capacity Building Fund

Total number of members: There shall be at least 7 members in the governing council who have received representation from the above categories.

Administrative Staff: There shall be an administrative staff that supports the governing council in conducting day-to-day activities.

Procedure, frequency, quorum etc.:  The procedure, quorum, frequency etc., for the meeting of the governing council for SSE shall be prescribed by the board of the stock exchange. Along with this, the board is also responsible for framing guidelines on handling potential conflicts of interest.

Meeting:  The governing council for SSE shall meet at least 4 times in a financial year.

What are the terms of Reference for Governing Council of the Social Stock Exchange?

The governing council is expected to provide insight and guidance for the smooth functioning of the SSE. Further, the governing council shall handle all social enterprises registration, fundraising and disclosure requirements. In accordance with this, the circular has provided that the terms of reference which shall as follows:

  1. To provide expert opinion on the development of SSE, including the growth of SSE, registrations, the listing of social enterprises and the total number of investors.
  2. To perform the function of overseeing the activities of SSE
  3. To provide guidance in framing procedures for onboarding or listing of social enterprises.
  4. To perform the function of overseeing the adequate disclosures made by the social enterprises.
  5. To assist in the development of necessary systems and processes.
  6. To perform the activity of reviewing the functioning of SSE.
  7. To undertake any matter in relation to the governance and development of SSE.

Prior Establishment of Governing Council

The circular has made it mandatory that the stock exchanges willing to establish a SSE as a separate segment shall constitute a governing council for the SSE before the final approval from SEBI.


The governing council shall be responsible for the functioning of the Social Stock Exchange. They shall prepare and assist in the registration process of the social enterprises willing to enter into an arrangement with them. The governing council shall comprise professionals from various institutions so that due diligence is maintained at all levels. It is also to be made sure that the governing council of the SSE shall be constituted before the final approval of the SEBI.

Read Our Article: Framework on Social Stock Exchange: SEBI

Nikhil Mogha

An Advocate by profession, Nikhil Mogha holds experience in the field of Business and Securities law. He has done his Masters of Law in Corporate Law from Guru Gobind Singh Indraprastha University, New Delhi. He is also versed with the drafting and research work in the field of Company Law, Banking Laws and Contract Laws.

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