Social Stock Exchange (SSE)

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Overview of Social Stock Exchange (SSE) in India: Empowering Investments for Social Impact

In recent years, a new financial frontier has emerged in India - the Social Stock Exchange (SSE). This ground-breaking concept blends the traditional capital markets with a profound focus on social and environmental impact. The SSE aims to revolutionize the way investments are made by facilitating funding for organizations and projects that address pressing social issues. In this blog, we will delve into the core aspects of the Social Stock Exchange in India, its objectives, benefits, and its potential to drive positive change.

Understanding the Social Stock Exchange (SSE)

The Social Stock Exchange is a platform that allows socially conscious investors to support and invest in social enterprises and non-profit organizations. Launched in India, it is a pioneering initiative that redefines the purpose of investments by emphasizing social and environmental outcomes alongside financial returns.

The SSE functions similarly to a conventional stock exchange, where listed organizations can raise funds by issuing shares. However, unlike conventional stock exchanges that focus solely on financial gains, the SSE scrutinizes and evaluates each listing based on its social impact. This evaluation process is conducted by accredited social audit agencies to ensure transparency and credibility.

Objectives of SSE in India

  1. Social Impact Amplification:

    The primary objective of SSE is to amplify the social impact of organizations that work towards addressing critical societal challenges such as poverty alleviation, healthcare, education, environmental sustainability, and gender equality. By directing investment towards such organizations, the SSE encourages the growth of their initiatives and promotes positive change.
  2. Unlocking Funding Opportunities:

    SSE provides a platform for social enterprises and non-profits to access funding from a wider investor base. It opens up opportunities for these organizations to scale up their operations, implement innovative solutions, and achieve sustainable growth.
  3. Encouraging Corporate Social Responsibility (CSR):

    The SSE aligns with the government's focus on CSR initiatives by enabling corporations to invest their CSR funds more strategically. It encourages businesses to go beyond mere compliance and actively contribute to social development.
  4. Transparency and Accountability:

    The SSE enforces stringent reporting and disclosure standards, ensuring that investors receive transparent information about the social impact of their investments. This level of accountability fosters trust among investors and beneficiaries alike.

Benefits of SSE

  1. Impactful Investments:

    SSE allows investors to put their money to work in ventures that have the potential to make a tangible difference in society. By channelling capital towards social enterprises, investors can actively participate in creating positive change.
  2. Diversification of Investment Portfolio:

    SSE offers investors a chance to diversify their investment portfolios by including socially impactful ventures. This diversification mitigates risk and enhances the resilience of an investment portfolio.
  3. Empowering Social Enterprises:

    For social enterprises and non-profits, SSE offers access to a broader investor base, which was traditionally limited to grants and donations. This new avenue of funding encourages innovation and scalability.
  4. Catalysing Social Innovation:

    The SSE fosters an ecosystem where social enterprises are incentivized to develop innovative solutions to pressing social problems. This, in turn, can lead to transformative advancements in various sectors.
  5. Reinforcing India's Sustainable Development Goals (SDGs):

    The SSE aligns with India's commitment to the United Nations' SDGs, as it directly supports initiatives focused on eradicating poverty, promoting good health, quality education, gender equality, and other critical goals.

Challenges and the Road Ahead

While the concept of SSE holds tremendous promise, its implementation comes with its share of challenges. Some of these challenges include establishing a robust evaluation framework for social impact, building awareness among investors, and ensuring the financial viability of listed organizations.

To overcome these hurdles, collaborative efforts are required from regulatory bodies, financial institutions, impact investors, and social enterprises themselves. Continued dialogue and knowledge sharing will be instrumental in refining the SSE framework and enhancing its effectiveness.

Sub: Minimum Requirement to be met by a Not for Profit Organization (NPO) for Registration with Social Stock Exchange (SSE)

Minimum Requirements to be met by a Not for Profit Organization (NPO) for registration with SSE in terms of Regulations 292F(1) of ICDR Regulations, shall fulfil the following criteria:

Broad Parameter



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

Ownership and control

Governing necessary paper (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


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

Minimum Initial Disclosure Requirement for NPOs raising funds through the issuance of Zero Coupon Zero Principal Instruments in terms of Regulation 292K(1) of the ICDR Regulations

  1.  SSE under the guidance of SSE Governing Council (SGC) shall mandate the structure of the draft fund raising necessary paper/ final fund raising necessary paper. SSE shall host such requirements on its website.
  2. SSE shall ensure that the necessary papers contain the following minimum disclosures:
  • Vision

Organisation’s activities, interventions and programmes are in line with aims and objects stated in its constitution.

  • Target Segment

Organisation has defined its target segment and reach to accomplish its planned activities. Clear identification and understanding of the target segment (those affected by the problem and how are they affected) The NPO must disclose how its approach intends to improve Inclusion for its customers / recipients

  • Strategy

Strategy formulation towards accomplishing vision should take into account capabilities and learning from challenges.

  • Governance

Organisation has a governing body and details of its governing body, composition, dates of board meetings held (key items covered).

  • Management

Details of key managerial staff such as those in charge of Programmes, Fundraising, Marketing, Communication, Finance, HR. Organisation discloses whether it provides letters to staff and volunteers defining roles and responsibilities, has a periodic performance appraisal process etc.

  • Operations

The organisation has a physical existence, is operational and shares its address for visits.

  • Finance

Disclosure of financial statements for last three Financial Years in accordance with guidelines for NPOs issued by Institute of Chartered Accountants of India (ICAI).

  • Compliance

Organisation makes available, annual accounts duly audited for the latest three financial years and there are no material qualifications or material irregularities reported by its auditor. Compliances w.r.t. Income Tax, notices received etc.

  • Credibility

necessary papers such as Registration, Trust Deed/ MoA and AoA, Address Proof, IT PAN, 12A/12AA/12AB Certificate, FCRA certificate and returns, remuneration to governing members.

  • Social Impact

Details of past social impact in terms of parameters specified in Para D(5) of this circular.

  • Risks

Disclose (i) risks that the NPO sees to its work and how it proposes to mitigate these (ii) unintended consequences that the NPO sees from its work and how it proposes to mitigate these.

Annual disclosure by NPOs on SSE which have either raised funds through SSE or are registered with SSE in terms of Regulation 91C of the LODR Regulations

The following disclosures would be made by the NPOs on an Annual Basis (i.e.) within 60 days from end of Financial Year

(1) Disclosures on General aspects:

  1. Name of the organization (legal and popular name)
  2. Location of headquarters and location of operations

iii. Vision / Mission / Purpose

  1. Organizational goals, activities, products and services
  2. Outreach of organization (Type and number of direct, indirect and institutional beneficiaries / stakeholders reached)
  3. Scale of operations (Including Employee and Volunteer strength)

vii. Details of top donors or investors of organisation - List of Top 5 donors or investors (budget wise)

viii. Details of top 5 programs in disclosure period - List of Top 5 interventions/programs (budget wise)

(2) Disclosures on Governance aspects:

  1. Ownership and legal form
  2. Governance Structure (outlines board and management committee structures, mandates, membership, charters, policies and internal controls)

iii. Details of governing body including names of the members of the body

  1. Executives with key responsibilities
  2. Number of meetings by governing body and other committees formed by them along with attendance and the process of performance review
  3. Organisation level potential risks and mitigation plan.

vii. Reporting of related party transactions.

viii. Mechanisms for advice and concerns about ethics, along with conflict of interest and communicating other critical concerns

  1. Remuneration Policies
  2. Stakeholder grievance, process of grievance redressal and number of grievance received and resolved
  3. Compliance management process and statement of compliance from senior decision maker

xii. Organisation registration certificate and other licenses and certifications (12A, 80G, FCRA, GST, etc.)

(3) Disclosures on Financial aspects:

  1. Financial Statement (Balance Sheet, Income statement and Cash Statement). Also program wise fund utilization for the year
  2. Auditors report and auditor details

(4) A guidance note in respect of the above aspects in provided at Annexure I.

(5) SSE may specify additional parameters that may be required to be disclosed by NPO on annual basis.

Disclosure of Annual Impact Report by all Social Enterprises which have registered or raised funds using SSE in terms of Regulation 91E of the LODR Regulations

(1) All Social Enterprises (SEs) will have to provide duly audited Annual Impact Report (AIR) to SSE within 90 days from the end of Financial Year.

(2) The AIR shall capture the qualitative and quantitative aspects of the social impact generated by the entity and where applicable, the impact that is generated by the project or solution for which funds have been raised on SSE.

(3) In case an NPO is only registered without listing any security, the AIR must cover the NPO’s significant activities, intervention, programs or projects during the year and the methodology for determination of significance must be explained. Additionally, if there is an activity, intervention, program or projects covered under a listed security, it will qualify as a significant activity, intervention, program or project.

(4) For a Social Impact Fund where the underlying recipients of funds are SEs which have registered or raised funds using SSE, must disclose an overall AIR for the fund covering all investee/grantee organizations where the fund is deployed.

(5) The AIR should at a minimum, cover the aspects described below.

  1. Strategic Intent and Planning

  2. What is the social or environmental challenge the organization and/or the instrument listed is addressing? Has this changed in the last year?
  3. How is the organization attending to the challenge or planning to attend to the challenge? Has this changed in the last year?

iii. Who is being impacted (target segment)? Has this changed in the last year?

  1. What will be the outcomes of the activities, intervention, programs or project? Disclosure should include positive and potential unintended negative outcomes.
  2. Approach

  3. What is the baseline status / situation analysis / context description at the start of the activity/intervention/programs or project and at the end of the last reporting period?
  4. What has been the past performance trend? (if relevant)

iii. What is the solution implementation plan and the measures taken for sustainability of activity/intervention/programs or project outcomes? Has there been any material change in your implementation model in the last one year?

  1. Please brief out alignment of solution to Sustainable Development Goals (SDGs)/national priorities/state priorities/ developmental priorities.
  2. How have you taken into consideration stakeholder feedback in this reporting period?
  3. In the last year, what have you seen as the biggest risks to the achievement of the desired impact? How are these being mitigated?
  4. Impact Score Card

  5. What are the metrices monitored and what has been the trend?

Page 8 of 16

  1. Briefly include narratives of impact on target segment(s) in the reporting period.

iii. Beneficiary/Stakeholder Validation through surveys and other feedback mechanisms

(6) A guidance note in respect of the above aspects is provided at Annexure II.

(7) SSE may specify additional parameters that may be required to be disclosed by SE in its AIR.

(8) The AIR shall be audited by Social Auditors and the SEs shall disclose the report of the Social Auditor along with AIR

  1. Statement of utilisation of funds in terms of 91F of the LODR Regulations

Listed NPO shall submit statement of utilisation of funds to SSE, as mandated under Regulation 91F of the LODR Regulations, within 45 days from the end of quarter.




The Social Stock Exchange in India represents a transformative approach to finance, combining profit-making with social impact. By creating a dedicated marketplace for socially conscious investments, the SSE has the potential to mobilize substantial capital towards solving societal challenges. It provides a platform for investors to align their financial goals with their values and contributes to the overall well-being of communities and the environment. As the SSE gains traction and evolves, it holds the promise of becoming a powerful catalyst for social change, reshaping the landscape of investing in India and beyond.

Frequently Asked Questions

Social Stock Exchange (SSE) is a separate segment of the existing Stock Exchange, that can help Social Enterprise(s) to raise funds from public through the stock exchange mechanism. SSE will act as a medium between Social Enterprises and fund providers and that can help them to select those entities that are creating measurable social impact and reporting such impact. Certain type of Social Enterprises i.e. Not-for-profit organizations (NPOs) that meet the registration criteria can register on SSE and undertake to make continuous disclosures on their social impact. Such NPOs may or may not choose to raise funds through SSE, however, would continue to make disclosures including on social impact to stock exchanges.

Social Stock Exchange identifies the following two forms of social enterprises that are engaging in the activity of creating positive social impact and that meets primacy of their social intent. i. Not-for-profit organization ii. For profit social enterprise In order to establish primacy of social intent, any entity [be it Not-for-Profit Organization (NPO) or For-Profit Social Enterprise (FPE)] should meet all three criterions mentioned under Regulation 292E(2) of the ICDR Regulations. Briefly, these criteria require that the entity must indulge in activities prescribed under Regulation 292E(2)(a), and that the entity must target underserved or less privileged population segments or regions which have recorded lower performance in the development priorities of central or state governments. Further, in order to be identified as a social enterprise, it shall demonstrate that 67% of its activities qualifying as eligible activities to the target population shall be demonstrated by either of the following: i. At least 67% of its revenue of the immediately preceding 3-year average of revenues comes from providing eligible activities to members of the target population. or ii. at least 67% of the immediately preceding 3-year average of expenditure has been incurred for providing eligible activities to members of the target population. or iii. members of the target population to whom the eligible activities have been provided constitute at least 67% of the immediately preceding 3-year average of the total customer base and/or total number of beneficiaries. However, corporate foundations, political or religious organizations or activities, professional or trade associations, infrastructure, and housing companies, except affordable housing, shall not be eligible to be identified as a Social Enterprise.

The minimum reporting standards have been created by benchmarking elements from various national and international frameworks of measurement that have been developed and are being deployed. The main elements of the reporting standard are as

Section 1- Strategic Intent and Goal Setting

  • The social problem to be solved
  • The target segment to be served
  • The approach to solve the problem
Section 2- Social Impact Scorecard
  • Extent of target segment served
  • Intensity of impact on median individual
  • Dimensions of income, social equity and diversity
Section 3- General information
  • Members of governing body
  •  Demonstration of prior funding history
  • Financials, Registrations or licenses

A Social Enterprise shall not be eligible to register or raise funds through Social Stock Exchange/Stock Exchange if

  • Any of its promoters, promoter group or directors or selling shareholders ( in case of for-profit social enterprise) or trustees are debarred from accessing the securities market by SEBI
  • If any of the promoters or directors or trustees of the Social Enterprise is a promoter or director of any other company or Social Enterprise which has been debarred from accessing the securities market by SEBI
  • if the Social Enterprise or any of its promoters or directors or trustees is a willful defaulter or a fraudulent borrower
  • If any of its promoters or directors or trustees is a fugitive economic offender
  • if the Social Enterprise or any of its promoters or directors or trustees has been debarred from carrying out its activities or raising funds by the Ministry of Home Affairs or any other ministry of the Central Government or State Government or Charitable Commissioner or any other statutory body

A not for profit organization is an entity which meets the criteria to be identified as a social enterprise and is any of the following entities

  • a charitable trust registered under the public trust statute of the relevant state
  • a charitable society registered under the Societies Registration Act, 1860 (21 of 1860)
  • a company incorporated under section 8 of the Companies Act, 2013 (18 of 2013)
  • any other entity as may be specified by SEBI

A for profit social enterprise is an entity which meets the criteria to be identified as a social enterprise and is any of the following entities

  • A company under the Companies Act, 2013, operating for profit and does not include a company incorporated under section 8 of the Companies Act, 2013 (18 of 2013)
  • A body corporate operating for profit

A Not-for-Profit organization, after registering with Social Stock Exchange may raise funds on Social Stock Exchange through

  • Issuance of Zero Coupon Zero Principal Instruments [through private placement or public issuance]
  • Donations through Mutual Fund Schemes [as shall be specified by
  • Any other means that SEBI may specify in future

Yes, it is mandatory for a Not-for-profit organization to register with Social Stock Exchange before it raises funds through Social Stock Exchange. However, a Not-for-profit organization may continue to raise funds through any other means, as permissible under the law, whether it is registered or not with Social Stock Exchange.

SEBI vide its circular dated September 19, 2022 has prescribed certain minimum requirements in order for a not-for-profit organization to register on Social Stock Exchange. In brief, these criteria include mandatory age of NPO as 3 years, valid certificate u/s 12A/12AA/12AB of the Income Tax Act, valid 80G registration, minimum INR 50 lakhs as annual spending and minimum INR 10 lakhs of fund in the past year etc.

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