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Social Stock Exchange (SSE) is a separate segment created by stock exchanges to help social enterprises raise funds from the public. Certain types of social enterprises like not-for-profit organizations (NPOs) can register on SSE and undertake to make continuous disclosures on their social impact.

India witnessed its first-ever listing on the Social Stock Exchange (SSE) on Wednesday with the debut of SGBS Unnati Foundation.

The Bengaluru-based not-for-profit organization (NPO) raised a little less than Rs 2 crore from high net-worth individuals (HNIs) by listing on the SSE.

Through the funds raised, the NGO plans to train about 10,000 graduates from government colleges and assist them in employment placement through its UNXT program.

The issue was subscribed 90% and the NGO managed to raise about Rs 1.8 crore, according to reports.

ETMarkets explains what a social stock exchange is, and how it’s different from the other exchanges.

What is Social Stock Exchange?

Social Stock Exchange (SSE) is a separate segment created by stock exchanges to help social enterprises raise funds from the public.

Certain types of social enterprises like not-for-profit organizations (NPOs) 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.

What is an NPO in the context of Social Stock Exchange?

An NPO should be -

1. A charitable trust registered under the public trust statute of the relevant state
2. A registered charitable society
3. A company incorporated under section 8 of the Companies Act
4. Any other entity as may be specified by SEBI

Instruments through which NPOs can raise funds?

An NPO registered with the Social Stock Exchange can raise funds through,