What is Social Stock Exchange (SSE) and How to get SSE License?

Registering Social Stock Exchange provides the following 3 strategic benefits for social enterprises:

• Increased Credibility: Being listed on a regulated exchange adds a layer of credibility & trust, making it increasingly in social impact.
• Various Funding Opportunities: By listing on the Social Stock Exchange, social enterprises can reach out to an extensive investor base, which includes institutions & individuals interested in social impact.
• Accountability & Transparency: As the listing process needs documentation & audits, it completely ensures that the listed Stock Exchange maintains high standards of transparency & accountability.
• Innovating for Impact: The Social Stock Exchange encourages an environment in which social enterprises are motivated to create new & inventive answers to urgent social problems with the help of innovation in the social impact. It could result in groundbreaking progress in different industries.
• Investment Portfolio: Social Stock Exchange provides investors with an opportunity to access the portfolio for investment purposes & to distribute their investment portfolios by adding socially impactful ventures. Diversifying helps reduce risk & makes an investment portfolio more resilient.

What are Key Features in Listing Criteria?

The following are some aspects in listing criteria:

1. Documentation & Registration: A Non-Profit Organisation wanting to list on the Social Stock Exchange needs to register with it just like companies planning an IPO, Non-Profit Organisations must produce widespread documentation. This also includes as detailed fund-raising document with financial statements, risks, past social impact & strategy to achieve their vision.

2. Social Enterprises Eligibility: A social enterprise may be eligible for onboarding on the Social Stock Exchange if it demonstrates that social intent & impact are its main goals. Social Stock Exchange -listed entities must align their mission with social welfare objectives.

3. Minimum Criteria: The following are some common criteria:

• Age of Non-Profit Organisation (NPO): The organisation should have been in operation for atleast 3 years;
• Annual Spending: The Non-Profit Organisation’s spending should be a minimum of Rs. 50 lakhs yearly;
• Income Tax Certifications: They should have certificates that are valid under Sections 12A or 12AA or 12AB of the Income Tax Act;
• Fund Availability: In the last financial year, the Non-Profit Organisation should have had an annual spending of a minimum of Rs. 50 lakhs & funding of at least Rs. 10 lakhs.

4. Impact Reporting: Social Stock Exchange listed entities must regularly report on their social & environmental performance. Investors can access real-time impact data to confirm transparency.

5. Social Intent & Impact Assessment: Demonstrating a clear social purpose is important for listing as the Social Stock Exchange evaluates the Organisation’s commitment to social welfare.

The following are the requirements for Obtaining a Social Stock Exchange License:

1. The entity must be registered as Non-Profit Organisation with the Registration Certificate valid for the period of the next 12 months during the Registration with the Social Stock Exchange for these entities mentioned

• Charitable Trusts are registered under the Societies Registration Act, 1860 and Indian Trust Act, 1882;
• Charitable Trusts that are registered under the Public Trust Statute of the relevant state;
• Any company registered under Section 8 of the Companies Act, 2013;
• The validity period of the NPO after getting the Registration Certificate is for atleast 3 years;
• Income Tax Act, 1960 provides for the deduction under Section 80G for the entity to ensure that if the tax deduction is available to the investors;
• To be exempted under Income Tax Act for getting the Certificate under Section 12 or 12AA or 12AB given under the same act that is valid for next 12 months & not giving notice or any ongoing scrutiny by the Income Tax;
• To be eligible as a social enterprise, it is required to follow the regulations under Sectio-292E of the ICDR Regulation as specified under SSE;
• In case the Non-Profit Organisation is owned or even controlled by the Government or a Private Institution, the ownership & control of the governing papers like AoA & MoA or a Trust Deed or bylaws must be disclosed.

2. Minimum Fund Flows: Yearly spend for the last financial years for the receipts or the payments from audited accounts or fund flows management for the minimum amount of Rs. 50 lakhs;

3. Funding is to be held in the last financial year for the receipts generated from the audited accounts of any fund flow management for at least Rs. 10 lakhs.

What are Challenges with Social Stock Exchange (SSE)?

Though, the SSE License shows huge potential but there are some hurdles n its execution. To solves these hurdles, there is a need for good cooperation from regulatory bodies, financial institutions, impact investors & social enterprises to establish a strong evaluation framework for social impact, raise awareness among investors & confirm the financial sustainability of listed organisations. Continuing discussion & exchange of information will play an important role in improving the Social Stock Exchange framework & increase its efficiency. We will help you throughout the Social Stock Exchange License process with our expert for the betterment of your enterprise/Non-Profit Organisations (NPOs).

At Whizseed, we help NPOs looking to register with the Social Stock Exchange & get a Social Stock Exchange License.

• Eligibility Assessment: Our team of SSE consultants will check the eligibility of your organization for the SSE based on SEBI regulations.
• Compliance Support: We will help you end-to-end compliance support, from the application process to registration completion.
• Documentation: Our experts will help you in preparing & reviewing all the documents to channel the registration work effortlessly.
• Financial Reporting: You might be looking for someone who can manage the financial reporting part of the Social Stock Exchange Registration. Your financial reports need end with our expert guidance & end-to-end service.
• Post-listing support: We are here to help you beyond the listing on SSE & the acquisition of a social stock exchange license.
• Social Audit: Our expert team will conduct a social audit of your venture & recommend the correct way to help you grow your business in the future.