The has relaxed key norms for the Social Stock Exchange (SSE), extending the registration validity for not-for-profit organisations (NPOs) and lowering the minimum subscription requirement for Zero Coupon Zero Principal (ZCZP) instruments.
In a bid to promote SSEs and facilitate ease of fundraising by NPOs, SEBI has allowed them to remain registered on the SSE for up to three years without raising funds, compared with the earlier two-year limit.
“It is being specified that a NPO may register on a SSE and not raise funds through it for a period of two years from the date of registration. Such a period of two years may be further extended by one additional year subject to approval by the SSE,” the regulator said in a circular on Wednesday.
The move takes into account practical challenges faced by NPOs, including delays in statutory and regulatory approvals that often slow fundraising.
SEBI has also reduced the minimum subscription requirement for ZCZP instruments to 50 per cent from 75 per cent, subject to conditions.
“The minimum subscription required to be achieved shall be 75 percent… Provided that the minimum subscription… shall be 50 per cent in case where the funds raised can be deployed… in a manner that the implementation of the project remains viable and meaningful,” SEBI said.
The relaxation will apply only to projects where costs and outcomes can be implemented on a clearly identifiable per-unit basis, ensuring that partial funding does not undermine execution.
“For this, the SSE shall… undertake due diligence to satisfy themselves that the funds raised… are capable of being deployed in a meaningful manner,” it added.
SEBI also said funds must be refunded to investors if the minimum subscription requirement is not met. NPOs will need to disclose how they plan to raise the remaining capital in case of under-subscription, and outline the potential impact on project outcomes if the gap is not bridged.
The latest measures build on SEBI’s broader push to scale up the SSE framework, which aims to channel capital towards social enterprises. In its last board meeting in March, the regulator reduced the minimum investment size for social impact funds to ₹1,000 from ₹2 lakh to widen retail participation. While the SSE has established the regulatory framework for social fundraising, participation has remained modest.