SEBI issued Master Circular on Social Stock Exchange

On 19-1-2026, the Securities Exchange Board of India (‘SEBI’) issued a Master circular for Framework on Social Stock Exchange (‘SSE’). It is a regulatory framework governing registration, fundraising, disclosures, impact reporting, and governance for Social Enterprises and Not-for-Profit Organisations (‘NPOs’).

Key Highlights of Master Circular on Social Stock Exchange:

1. This circular consolidates all previous directions, amendments, and regulatory requirements relating to the operations of Social Stock Exchanges under the SEBI (ICDR) Regulations, 2018 and SEBI (LODR) Regulations, 2015.

2. The Social Stock Exchange is designed to enable Not-for-Profit Organisations and eligible for-profit Social Enterprises to raise funds in a regulated, transparent, and credible manner.

3. This Master Circular provides detailed provisions for:

   • Registration of NPOs on the SSE

   • Public issuance of Zero Coupon Zero Principal Instruments (ZCZP)

   • Mandatory disclosures and reporting

   • Annual Impact Reports (‘AIR’)

   • Roles and responsibilities of Social Impact Assessors

   • Governance through a dedicated SSE Governing Council

4. By combining all relevant circulars into one document, SEBI aims to simplify compliance and ensure uniformity across SSE platforms.

5. NPOs seeking registration on an SSE will have to meet stringent legal, financial, and operational norms, including:

   • Registration as a charitable trust, society, or Company under Section 8 of Companies Act, 2013.

   • Valid Income Tax registrations (12A/12AA/12AB/10(23C)/10(46)).

   • Valid PAN.

   • Transparent ownership and control structure.

   • Minimum 3 years of existence.

   • At least ₹50 lakhs of spending in the previous financial year.

   • At least ₹10 lakhs of funding received in the previous financial year.

   • Disclosure of pending regulatory notices, scrutiny, penalties, or litigations.

   • Updated documentation such as MoA, Trust Deed, FCRA certificates, audited accounts, and governance details.

6. An innovative fundraising avenue on SSE is the Zero Coupon Zero Principal Instruments (‘ZCZP’) instrument, which offers zero financial return but enables investors to contribute to verified social impact.

7. Key conditions include:

   • Minimum issue size: ₹50 lakhs

   • Minimum application size: ₹1,000

   • Non-transferable until maturity

   • Issued only in dematerialized form

   • Mandatory minimum subscription of 75%

   • Refund if subscription falls below 75%

     ○ Draft fundraising document subject to:

     ○ 21day public comment

     ○ SSE scrutiny and observation period

     ○ Final filing prior to issue opening

8. All social enterprises that raise funds through SSE will submit a duly assessed Annual Impact Report by October 31 each year.

9. To ensure professional and standardized impact assessment, SEBI notifies the following as Self-Regulatory Organizations:

   • ICAI Social Auditors

   • ICMAI Social Auditors Organisation (‘SAO’)

   • ICSI Institute of Social Auditors (‘ISA’)

10. These bodies regulate, certify, and set standards for Social Impact Assessors.

11. Each SSE will constitute a Social Stock Exchange Governing Council (‘SGC’) consisting of at least seven members, representing:

    • Philanthropic/social sector donors

    • NPOs

    • Information repositories

    • Social impact investors

    • Social audit profession/SROs

    • Capacity-building institutions

    • Stock Exchange officials

12. The SGC provides oversight on listing, disclosures, governance, feedback mechanisms, and development of SSE.