Setting up the Social Stock Exchange is on the lines of a proposal made by the government in the Union Budget of 2019-20 (April-March) to create a platform for listing social enterprises and voluntary organisations.
Through this exchange, such organisations can raise capital through equity or debt instruments.
“We are working towards the launch of the Social Stock Exchange as a segment on the NSE. We believe this platform will immensely benefit the social ...
...enterprises contributing to the sustainable development goals,” Ashishkumar Chauhan, MD and CEO of NSE, was quoted as saying in a release.
To enable fundraising for not-for-profit organisations, the government had announced a new security called “zero coupon zero principal” under the Securities Contracts Regulations Act.
Subscription to this instrument would be like a philanthropic donation. Social Stock Exchanges provide a unified funding channel to listed social enterprises that are at the bottom of the socio-economic pyramid.
The concept gained momentum, particularly in India during the pandemic, as the need for social capital for enterprises and voluntary organisations became essential.
Countries like Brazil, Portugal, South Africa, the UK, Canada and Singapore already have established Social Stock Exchanges. These do not represent the views of Economic Times)