In a major development on the bourses front, the National Stock Exchange (NSE) has received the market regulator Securities and Exchange Board of India (SEBI’s) approval to start a new segment. The social stock exchange (SSE) will now be the new segment entering the market, backed by the NSE.
According to an official release, the approval from SEBI to NSE means that the SSE can now be launched as a new platform and the bourse can accordingly sign-up relevant entities for listing. However, it must be noted that SEBI also reportedly gave an in-principle to NSE last year for the purpose of the SSEs launch.
Now, with the final go ahead, the Indian markets can soon expect SSE in the picture and more information about their functioning is expected soon in the public domain.
The official press release reads, “The Social Stock Exchange segment will provide new avenue for social enterprises to finance social initiatives, provide them visibility and bring in increased transparency in fund mobilisation and utilisation by social enterprises.”
Since SSE is a new segment, it is only natural for many to not know about it. To explain – SSEs or social stock exchange(s) are a form of fundraising platform, designed and made specifically for the social enterprises. The main idea behind them is to enable social enterprises tap into broader sources of donations.
As mentioned before, through SSEs, the NSE will be able to sign-up relevant entities for listing. It must be noted that the process of listing for SSEs works similar to a normal initial public offerings (IPO). However, in case of an SSE, participants are not allotted shares, but Zero Coupon Zero Principal (ZCZP) instruments.
