• Every Social Stock Exchange will be required to form a Governing Council
• The GC will be expected to contribute expertise to the development of the SSE
• GC will facilitate effective oversight of the sufficiency of Social Enterprise disclosures and guide the development of necessary systems and processes in this regard

The Securities and Exchange Board of India (SEBI) has amended its regulations to create a framework for social stock exchange governance. Every Social Stock Exchange will be required to form a Governing Council so that the Governing Council can oversee the operation of the Social Stock Exchange.

Individuals with relevant expertise who can contribute to the development of SSE will form the Governing Council. The Governing Council will include representatives from the philanthropic and social sectors, information repositories, non-profit organisations, the social audit profession, the Capacity Building Fund, the Stock Exchange, and social impact investors. Representation can be balanced by bringing in experts from various stakeholder groups.

The Governing Council will have a minimum of seven members and will meet at least four times per fiscal year. Administrative staff from Social Staff Exchange will assist the Council.

The Stock Exchange’s Board of Directors will establish guidelines for the operation of GC.

The GC will be expected to contribute expertise to the development of the SSE, including an increase in the number of social enterprises registered/listed and investors. It will supervise SSE’s listing function and provide guidance in developing procedures for onboarding and listing Social Enterprises.

It will facilitate effective oversight of the sufficiency of Social Enterprise disclosures and guide the development of necessary systems and processes in this regard.

Finance Minister Ms. Nirmala Sitharaman first mentioned the Social Stock Exchange (SSE) concept in her Budget Speech 2019-20. SSE will function as a separate division of the existing stock exchanges. Following that, Sebi issued a framework for SSE, allowing social enterprises to raise capital from the market. The framework for the Social Stock Exchange (SSE) was created based on the recommendations of a technical group formed by the market regulator.

Following SEBI’s lead, the ICAI has approved the formation of a Self-Regulatory Organization (SRO) to oversee the operation of social auditors under the SEBI-approved framework for social stock exchanges, to be known as Institute of Social Auditors of India

Many Social Enterprises will be able to raise funds from investors and CSR funds (subject to fulfilling of conditions). The listing of such a business on a dedicated exchange will help investors exit. SSE will also aid in the comparison of the performance of social enterprises, act as a catalyst for providing solutions to mass problems, and promote vibrant entrepreneurship in the country.

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