A Social Stock Exchange (SSE) is a platform in India that facilitates the listing and trading of social enterprises and impact-focused businesses. The primary aim of a Social Stock Exchange is to provide social enterprises with access to long-term capital and help them to achieve financial sustainability while also making a positive impact on society.

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.

In India, the Social Stock Exchange operates under the regulations set by the Securities and Exchange Board of India (SEBI) and is designed to help social enterprises that are working towards social and environmental impact to attract investment and grow their businesses.

The SSE aims to create a new asset class that combines both financial returns and social impact, and provides investors with an opportunity to invest in businesses that are aligned with their values and have a positive impact on society.

Some of the key features of the Social Stock Exchange in India include:

  1. Listing Requirements: To be listed on the SSE, a company must demonstrate that it is making a positive social or environmental impact and that it is financially sustainable.
  2. Transparency: The SSE requires companies to provide regular reporting on their social and environmental impact, ensuring that investors have access to the information they need to make informed investment decisions.
  3. Impact Measurement: The SSE uses impact metrics to measure and monitor the social and environmental impact of companies listed on the exchange.
  4. Diversified Investment Opportunities: The SSE provides investors with a diverse range of investment opportunities across different sectors, allowing them to invest in companies that align with their values and interests.

The Social Stock Exchange in India is still in its early stages of development, but it has the potential to play a significant role in addressing some of the country’s most pressing social and environmental challenges by providing social enterprises with access to capital and investment.

MCQs on Social Stock Exchange in India

  1. What is the purpose of the Social Stock Exchange in India?
    A. To provide a platform for social enterprises to raise capital
    B. To promote socially responsible investing
    C. To facilitate the exchange of socially responsible securities
    D. All of the above
    Correct Answer: D) All of the above
    Explanation:
    The Social Stock Exchange in India aims to provide a platform for social enterprises to raise capital, promote socially responsible investing, and facilitate the exchange of socially responsible securities. By doing so, it aims to encourage investment in companies and organizations that are focused on creating positive social and environmental impact.
    Source: Social Stock Exchange.
  2. What are the eligibility criteria for a company to list on the Social Stock Exchange in India?
    A. A minimum of 50% of the company’s profits must be invested in social causes
    B. The company must have been in operation for at least 5 years
    C. The company must have a minimum net worth of INR 100 million
    D. All of the above
    Correct Answer: D) All of the above
    Explanation:
    To be eligible for listing on the Social Stock Exchange in India, a company must meet all of the following criteria: have a minimum of 50% of its profits invested in social causes, have been in operation for at least 5 years, and have a minimum net worth of INR 100 million. These criteria are designed to ensure that only companies that are committed to creating positive social and environmental impact are allowed to list on the exchange.
    Source: Social Stock Exchange.

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