Sebi directs social enterprises to submit annual impact reports to SSE
Regulator specified ICAI, ICMAI and ICSI as social impact assessors
image for illustrative purpose
Social enterprises, which have registered or raised funds through SSE shall be required to submit Annual Impact Report to SSE by Oct 31, 2024, for 2023-24 financial year, Sebi said in a circular
New Delhi: Capital markets regulator Sebi on Monday asked social enterprises, which have registered or mobilised funds through social stock exchange (SSE), to submit an ‘annual impact report’ for the financial year 2023-24 to bourses by October-end.
The annual impact report to SSE captures the qualitative and quantitative aspects of the social impact generated by the social enterprise. In case a Not for Profit Organization (NPO) is only registered without listing any security, such report is required to cover the NPO’s significant activities, intervention, and programmes, among others.
“Social enterprises, which have registered or raised funds through SSE shall be required to submit Annual Impact Report to SSE by October 31, 2024 for the Financial Year 2023-24,” Sebi said in a circular.
In September 2023, Sebi asked social enterprises raising funds using SSE to disclose the annual impact report within 90 days from the end of financial year. With an aim to assess the impact created by social activities by the social enterprises, Sebi has specified additional agencies -- ICMAI Social Auditors Organization under the Institute of Cost Accountants of India and ICSI Institute of Social Auditors under the Institute of Company Secretaries of India -- as Self Regulatory Organisations (SROs) for social impact assessors in the context of SSE. These are eligible to act as platforms to register social auditors.
These are in addition to the SRO mentioned under the Institute of Chartered Accountants of India (ICAI) for the social impact assessor. A social impact assessor means an individual registered with self regulatory organization under the Institute of Chartered Accountants of India or such other agency, who has qualified a certification programme conducted by National Institute of Securities Market (NISM).
SSE is a novel concept in India and it is a separate segment of the existing stock exchange, which helps social enterprises to garner funds from public through the stock exchange mechanism. Social enterprises eligible to participate in the SSE are entities -- NPOs and for-profit social enterprises -- having social intent and impact as their primary goal. Also, such an intent should be demonstrated through its focus on eligible social objectives for the underserved or less privileged populations or regions. The social enterprises will have to engage in a social activity out of 16 broad activities listed by the regulator.
The eligible activities include eradicating hunger, poverty, malnutrition and inequality; promoting healthcare, supporting education, employability and livelihoods; gender equality empowerment of women and LGBTQIA+ communities; and supporting incubators of social enterprise.
