SEBI has recently issued a consultation paper inviting comments on proposed changes to the Social Stock Exchange (SSE) framework which broadly focuses on updates to NPO registration, reporting requirements, and disclosure norms for better transparency and accountability.ย A total of 32 proposals / recommendations have been made the Social Stock Exchange Advisory Committee (SSEAC).
Some of the key highlights of the Proposed Changes:
(a) ๐๐ฑ๐ฉ๐๐ง๐๐๐ ๐๐๐ ๐๐ฅ๐ข๐ ๐ข๐๐ข๐ฅ๐ข๐ญ๐ฒ: To expand the list of legal structures recognized as NPOs under the ICDR Regulations to include:
Trusts registered under the Indian Registration Act, 1908.
Charitable societies registered under state society registration statutes.
Companies registered under Section 25 of the Companies Act, 1956.
(b) Substituting the term โSocial Impact Assessment Firmโ with โSocial Impact Assessment Organizationโ
(c) Expanding the list of eligible activity to be identified as Social Enterprise to include (1) welfare of disadvantaged children, women, destitute, elderly and the disabled (2) vocational skills (3) promotion and education of art, culture and heritage and include all heritage instead of only national heritage
(d) Expand the target segment for Social Enterprises to include environmental and cultural ecosystem entities and Include activities like welfare for disadvantaged children, vocational training, and promotion of cultural heritage in eligible activities for Social Enterprises
(e) ๐๐ข๐ฆ๐ฉ๐ฅ๐ข๐๐ข๐๐ ๐๐๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐ : Introduction of standardized forms and timelines for annual disclosures and social impact reports.
(f) Social Impact Reporting for listed projects and non-listed significant projects should account for at least 67% of programme expenditure in the previous financial year
(g) To now include โProject/Programme Proposalโ along with the minimum initial disclosures for raising funds on Social Stock Exchange through Zero Coupon Zero Principal Instruments.
(h) In order to improve Transparency it has also been recommended to provide for additional governance details, including tenure, remuneration, government licenses, details of โVisionโ, โProcess of Performance Reviewโ, โOrganization level potential risks and mitigation planโ, ย and accreditation.
(i) Introduction of Mid-Term and End-Term Reports for projects of three years or more, alongside annual reports.
A copy of the SEBI Consultation Paper is enclosed. Readers can share their views with Regstreet Law Advisors at info@regstreetlaw.com.