MUMBAI: Capital Markets regulator Securities and Exchange Board of India (Sebi) on Tuesday decided on a framework for the social stock exchange for fundraising by social enterprises. The framework for the Social Stock Exchange (SSE) has been developed on the basis of the recommendations of a working group and technical group constituted by the regulator.

Sebi Chairman Ajay Tyagi said that SSE will be a separate segment of the existing stock exchanges. Social Enterprises (SEs) eligible to participate in the SSE should be entities -- Non-Profit Organisations (NPOs) and for-profit social enterprises -- having social intent and impact as their primary goal. Also, such intent should be demonstrated through its focus on eligible social objectives for the underserved or less privileged populations or regions.

The social enterprises will have to engage in a social activity out of the list of 15 broad activities approved by Sebi. Tyagi said that he can't specify the timeline for the exchange and will coordinate with the government to take it ahead. With regard to fundraising, Sebi said eligible NPOs may raise funds through equity, zero-coupon zero principal bonds, mutual funds, social impact funds, and development impact bonds.

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