CIRCULAR
SEBI/HO/MRD/MRD-RAC-2/P/CIR/2022/141 October 13, 2022
To
All Recognized Stock Exchanges
Dear Sir / Madam,
Sub: Governing Council for Social Stock Exchange (“SSE”)
1. Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018 (“ICDR Regulations”), Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(“LODR Regulations”) and Securities and Exchange Board of India (Alternative
Investment Funds) Regulations, 2012 (“AIF Regulations”) were amended vide
Gazette notification dated July 25, 2022, to provide a framework for Social Stock
Exchange.
2. As per Regulation 292D of the ICDR Regulations, every Social Stock Exchange
shall constitute a Social Stock Exchange Governing Council to have an oversight
on its functioning, with composition and terms of reference as specified by the
Board. Aspects related to the Social Stock Exchange Governing Council (“SGC”)
are specified below:
1) Composition of SGC
a) The SGC shall comprise of individuals with relevant expertise who can
contribute to the development of SSE. It shall have a balanced
representation, drawing from various categories of stakeholders such as:-
i. Philanthropic and social sectors including public / private sector
donors,
ii. Non-profit organizations
iii. Information Repositories
iv. Social Impact Investors
v. Social Audit Profession / self-regulatory organization for social
auditors,
vi. Capacity Building Fund
vii. Stock Exchange.
b) SGC will have a minimum of 7 members having representation from each
of the said categories (i to vii above)
c) SGC shall be supported by administrative staff from the SSE.
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d) The Board of the Stock Exchange shall prescribe the procedure,
frequency, quorum etc for the meetings of SGC as well as guidelines for
handling potential conflict of interest, if any.
e) SGC shall meet as frequently as required with minimum of four meetings
in a financial year.
2) Terms of Reference
The SGC is expected to provide oversight and guidance to facilitate the
smooth functioning of the operations of the Social Stock Exchange, with regard
to registration, fund raising and disclosures by Social Enterprises. Accordingly,
the terms of reference of the SGC shall include the following:
a) Provide expertise towards development of the SSE including growth of
registration/ listing of social enterprises and number of investors.
b) Oversee the listing function of SSE and provide guidance in laying down
procedures for on-boarding and listing of Social Enterprises.
c) Facilitate effective oversight on the adequacy of disclosures made by
Social Enterprises and guide development of necessary systems and
processes towards the same.
d) Review the functioning of the SSE, including feedback received from
stakeholders.
e) Any other matter related to governance and development of SSE.
3. The Stock Exchange shall constitute a Governing Council for the Social Stock
Exchange prior to seeking final approval from SEBI for introduction of Social Stock
Exchange as a separate segment.
4. This circular is being issued in exercise of the powers conferred under Section 11(1)
of Securities and Exchange Board of India Act, 1992, read with Regulation 292D of
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018 to protect the interest of investors in securities
market and to promote the development of, and to regulate the securities market.
5. This circular is available on SEBI website at www.sebi.gov.in at “Legal→Circulars”
Yours faithfully,
Susanta Kumar Sahoo
Deputy General Manager
Market Regulation Department
Email: sksahoo@sebi.gov.in
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