CIRCULAR
SEBI/HO/CFD/PoD-1/P/CIR/2022/120 September 19, 2022
To
All Recognized Stock Exchanges
All Recognized Depositories
All Merchant Bankers and Brokers registered with SEBI
All Social Enterprises
All Social Impact Fund registered with SEBI
All Social Audit Firms/ Institute of Chartered Accounts of India
Dear Sir / Madam,
Sub: Framework on Social Stock Exchange (“SSE”)
1. Vide notification dated July 25, 2022, 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 to provide a broad
framework for Social Stock Exchange.
In terms of the said amendment, a detailed framework on SSE is specified as
under:
A. Minimum requirements to be met by a Not for Profit Organization (NPO)
for registration with SSE in terms of Regulation 292F of the ICDR
Regulations
A NPO desirous of registration on SSE, in terms of Regulation 292F(1) of ICDR
Regulations, shall fulfil the following criteria:
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Broad Parameter Indicator Details
Legal Requirements
Entity is registered as Registration certificate valid Entities must be registered in
an NPO at least for next 12 months at India as one of the below:
the time of seeking a. a charitable trust
registration with SSE registered under the
public trust statue of the
relevant state;
b. a charitable trust
registered under the
Societies Registration
Act, 1860
c. a charitable trust
registered under the
Indian Trusts Act, 1882
d. a company incorporated
under section 8 of the
Companies Act, 2013
Ownership and control Governing document (MoA Disclose if NPO is owned
& AoA/ Trust Deed/ Bye- and/or controlled by
laws/ Constitution) government or private
Exemption under Registration Certificate Registration Certificate
Income Tax Act under section under section
12A/12AA/12AB under 12A/12AA/12AB to be valid
Income Tax Act, 1961 for at least the next 12
months. Does not have a
notice or ongoing scrutiny by
Income Tax.
Registration with IT PAN Valid IT PAN
Income Tax as an NPO
Age of the NPO Registration certificate Minimum 3 years
Deduction under Valid 80G registration under Entity to ensure whether tax
Income Tax Act, 1960 Income Tax Act, 1961. deduction is available or not
to investors.
Eligible to be Social Requirements with As may be specified by SSE
Enterprise Regulation 292E of ICDR
Regulations
Minimum Fund Flows
Annual Spending in Receipts or Payments from Must be at least Rs. 50 lakhs
the past financial year Audited accounts/ Fund Flow
Statement
Funding in the past Receipts from Audited Must be at least Rs. 10 lakhs
financial year accounts/ Fund Flow
Statement
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B. Minimum Initial Disclosure Requirement for NPOs raising funds through
the issuance of Zero Coupon Zero Principal Instruments in terms of
Regulation 292K(1) of the ICDR Regulations
(1) SSE under the guidance of SSE Governing Council (SGC) shall mandate
the structure of the draft fund raising document/ final fund raising document.
SSE shall host such requirements on its website.
(2) SSE shall ensure that the documents contain the following minimum
disclosures:
a. Vision
Organisation’s activities, interventions and programmes are in line
with aims and objects stated in its constitution.
b. Target Segment
Organisation has defined its target segment and reach to accomplish
its planned activities. Clear identification and understanding of the
target segment (those affected by the problem and how are they
affected) The NPO must disclose how its approach intends to
improve Inclusion for its customers / recipients
c. Strategy
Strategy formulation towards accomplishing vision should take into
account capabilities and learning from challenges.
d. Governance
Organisation has a governing body and details of its governing body,
composition, dates of board meetings held (key items covered).
e. Management
Details of key managerial staff such as those in charge of
Programmes, Fundraising, Marketing, Communication, Finance, HR.
Organisation discloses whether it provides letters to staff and
volunteers defining roles and responsibilities, has a periodic
performance appraisal process etc.
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f. Operations
The organisation has a physical existence, is operational and shares
its address for visits.
g. Finance
Disclosure of financial statements for last three Financial Years in
accordance with guidelines for NPOs issued by Institute of Chartered
Accountants of India (ICAI).
h. Compliance
Organisation makes available, annual accounts duly audited for the
latest three financial years and there are no material qualifications or
material irregularities reported by its auditor. Compliances w.r.t.
Income Tax, notices received etc.
i. Credibility
Documents such as Registration, Trust Deed/ MoA and AoA,
Address Proof, IT PAN, 12A/12AA/12AB Certificate, FCRA certificate
and returns, remuneration to governing members.
j. Social Impact
Details of past social impact in terms of parameters specified in Para
D(5) of this circular.
k. Risks
Disclose (i) risks that the NPO sees to its work and how it proposes
to mitigate these (ii) unintended consequences that the NPO sees
from its work and how it proposes to mitigate these.
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C. Annual disclosure by NPOs on SSE which have either raised funds
through SSE or are registered with SSE in terms of Regulation 91C of the
LODR Regulations
The following disclosures would be made by the NPOs on an Annual Basis (i.e.)
within 60 days from end of Financial Year
(1) Disclosures on General aspects:
i. Name of the organization (legal and popular name)
ii. Location of headquarters and location of operations
iii. Vision / Mission / Purpose
iv. Organizational goals, activities, products and services
v. Outreach of organization (Type and number of direct, indirect and
institutional beneficiaries / stakeholders reached)
vi. Scale of operations (Including Employee and Volunteer strength)
vii. Details of top donors or investors of organisation - List of Top 5
donors or investors (budget wise)
viii. Details of top 5 programs in disclosure period - List of Top 5
interventions/programs (budget wise)
(2) Disclosures on Governance aspects:
i. Ownership and legal form
ii. Governance Structure (outlines board and management committee
structures, mandates, membership, charters, policies and internal
controls)
iii. Details of governing body including names of the members of the
body
iv. Executives with key responsibilities
v. Number of meetings by governing body and other committees
formed by them along with attendance and the process of
performance review
vi. Organisation level potential risks and mitigation plan.
vii. Reporting of related party transactions.
viii. Mechanisms for advice and concerns about ethics, along with
conflict of interest and communicating other critical concerns
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ix. Remuneration Policies
x. Stakeholder grievance, process of grievance redressal and number
of grievance received and resolved
xi. Compliance management process and statement of compliance
from senior decision maker
xii. Organisation registration certificate and other licenses and
certifications (12A, 80G, FCRA, GST, etc.)
(3) Disclosures on Financial aspects:
i. Financial Statement (Balance Sheet, Income statement and Cash
Statement). Also program wise fund utilization for the year
ii. Auditors report and auditor details
(4) A guidance note in respect of the above aspects in provided at Annexure I.
(5) SSE may specify additional parameters that may be required to be disclosed
by NPO on annual basis.
D. Disclosure of Annual Impact Report by all Social Enterprises which have
registered or raised funds using SSE in terms of Regulation 91E of the
LODR Regulations
(1) All Social Enterprises (SEs) will have to provide duly audited Annual Impact
Report (AIR) to SSE within 90 days from the end of Financial Year.
(2) The AIR shall capture the qualitative and quantitative aspects of the social
impact generated by the entity and where applicable, the impact that is
generated by the project or solution for which funds have been raised on
SSE.
(3) In case an NPO is only registered without listing any security, the AIR must
cover the NPO’s significant activities, intervention, programs or projects
during the year and the methodology for determination of significance must
be explained. Additionally, if there is an activity, intervention, program or
projects covered under a listed security, it will qualify as a significant activity,
intervention, program or project.
(4) For a Social Impact Fund where the underlying recipients of funds are SEs
which have registered or raised funds using SSE, must disclose an overall
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AIR for the fund covering all investee/grantee organizations where the fund
is deployed.
(5) The AIR should at a minimum, cover the aspects described below.
a. Strategic Intent and Planning
i. What is the social or environmental challenge the organization
and/or the instrument listed is addressing? Has this changed in the
last year?
ii. How is the organization attending to the challenge or planning to
attend to the challenge? Has this changed in the last year?
iii. Who is being impacted (target segment)? Has this changed in the
last year?
iv. What will be the outcomes of the activities, intervention, programs or
project? Disclosure should include positive and potential unintended
negative outcomes.
b. Approach
i. What is the baseline status / situation analysis / context description
at the start of the activity/intervention/programs or project and at the
end of the last reporting period?
ii. What has been the past performance trend? (if relevant)
iii. What is the solution implementation plan and the measures taken for
sustainability of activity/intervention/programs or project outcomes?
Has there been any material change in your implementation model
in the last one year?
iv. Please brief out alignment of solution to Sustainable Development
Goals (SDGs)/national priorities/state priorities/ developmental
priorities.
v. How have you taken into consideration stakeholder feedback in this
reporting period?
vi. In the last year, what have you seen as the biggest risks to the
achievement of the desired impact? How are these being mitigated?
c. Impact Score Card
i. What are the metrices monitored and what has been the trend?
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ii. Briefly include narratives of impact on target segment(s) in the
reporting period.
iii. Beneficiary/Stakeholder Validation through surveys and other
feedback mechanisms
(6) A guidance note in respect of the above aspects is provided at Annexure
II.
(7) SSE may specify additional parameters that may be required to be disclosed
by SE in its AIR.
(8) The AIR shall be audited by Social Auditors and the SEs shall disclose the
report of the Social Auditor along with AIR
E. Statement of utilisation of funds in terms of 91F of the LODR Regulations
Listed NPO shall submit statement of utilisation of funds to SSE, as mandated
under Regulation 91F of the LODR Regulations, within 45 days from the end of
quarter.
2. This circular is issued in exercise of powers conferred by Section 11(1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market and shall come into effect immediately.
3. A copy of this circular is available on SEBI website at www.sebi.gov.in under the
categories “Legal Framework/Circulars”.
Yours faithfully,
Yogita Jadhav
General Manager
Corporation Finance Department
+91 22 2644 9583
Email - yogitag@sebi.gov.in
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Annexure I: Guidance notes for listed/registered NPOs on disclosures of
general, governance and financial aspects
General disclosures
1. Name of the organization (legal and popular name):
The reporting organization shall report on the registered name and also any
popular names the organization is known by among stakeholders.
2. Location of headquarters and location of operations:
Headquarter refers to the address that the organization has used in registering with
respective regulatory body and also the organizations administrative center, from
which it is controlled or directed. In case the locations are different, it needs to be
specified. Location of operations shall cover the name of the locations where the
organization has significant operation. Significant shall be defined to the scope of
fund raising document.
3. Vision/Mission/ Purpose:
It is important to understand the intent behind the disclosure and respond
accordingly. Purpose in this context is why the organization exists and explaining
why the cause taken up by the organization matters. The Mission will explain how
the organization is working in the context of the purpose and the Vision in the
context of this disclosure will be about where the organization is headed and what
the organization will achieve. It is possible that all organizations may not have all
the 3 (Vision, mission and purpose) as a stated document.
4. Organizational goals, activities, Products and Services:
The reporting organization shall mention overall objectives of the organization or
activity/intervention/programs or project listed. It shall also describe the
organization activities, including any products and services which the organization
provides.
5. Outreach of organization:
Organization to mention type and number of direct, indirect and institutional
beneficiaries / stakeholders reached across different programs and geographies.
6. Scale of operations (Including Employee and Volunteer strength):
The scale of the operations shall be explained by net turn-over/annual
budget/annual spent in last 3 years, number of beneficiaries, number of locations
of operations and number of employees and volunteers. Total number of
employees shall be disclosed separately as permanent employees, temporary
employees and employees on contract. The nature and scale of activities
performed by volunteers shall be disclosed. The organization shall disclose the
scale of operations either at a national level or at a state or district level as may be
useful for stakeholders.
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7. Top donors or investors of organisation - List of Top 5 donors or investors (budget
wise)
Sl Do Geo Total Expe Cumula Total SD Alignment with
. no grap progr nditur tive outreac G national/ state
N r hy am e in expendi h goa schemes or priority
o. or cost curre ture (Direct, l or
Inv (INR) nt (INR) Indirect, targ
est year Institutio et
or (INR) nal)
1
2
..
8. Details of top 5 programs in disclosure period - List of Top 5
activities/intervention/programs/project (budget wise)
Sl SD Geogr Total Expendit Cumulati Total Names Alignment
. G aphy progra ure in ve outreac of with
N goa m cost current expendit h Donors national/st
o. l or (INR) year ure (INR) (Direct, or ate
tar (INR) Indirect, investor schemes
get Institutio s or priority
nal)
1
2
..
Governance Disclosures
1. Ownership and legal form:
The organization shall explain the nature of ownership and the legal form on the
entity specific to India operations.
2. Governance Structure:
The governance structure will start from the governance body, the committees /
sub committees (standing/adhoc) under the governance body and the organization
hierarchy for decision making. It outlines board and management committee
structures, mandates, membership, charters, policies and internal controls.
3. Details of governing body including names of the members of the body:
The organization shall explain the role of the governance body, the competence
available and the identification of the members including name. Also name and
designation of the senior decision maker may be provided.
4. Executives with key responsibilities:
The disclosure will highlight the key executive positions and their role in the
organization.
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5. Number of meetings by governing body and other committees formed by them
along with attendance and the process of performance review:
The process to acquire the necessary information and data by the governance
body to review the performance of the organization shall be explained. The
disclosure shall also bring out the number of such meetings held by the
governance body, during the course of the reporting period.
6. Organisation level potential risks and mitigation plan:
The organization to describe potential risks and mitigation plan addressing the
same for organization and proposed solution/activity/intervention/programs or
project.
7. Reporting of related party transactions
The organization shall disclose all related party transactions entered by it and
reasons for the same.
8. Mechanisms for advice and concerns about ethics, along with conflict of interest
and communication of other critical concerns:
A description of the organizations internal and external mechanisms for seeking
inputs about ethical and lawful behavior and organisations integrity. It will also
include the identification of who in the organization is assigned the responsibility
for this mechanism. The concerns related to any conflict of interest and other
concerns raised by the mechanism above shall be disclosed along with the actions
the organization has taken.
9. Remuneration policies:
Remuneration policies for the governing body and the senior executive of the
organization shall be reported. This shall include all kinds of fixed pay, variable
pay and performance linked payments. It can also include any termination
payments and claw backs. It is also important to bring out how performance of the
organization is linked to remuneration.
10. Stakeholder grievance, process of grievance redressal and number of grievance
received and resolved:
Apart from concerns related to ethics, the organization shall report on what is the
organizations process to seek any stakeholder concerns or grievances. How many
such concerns or grievances were received and how many of them were resolved.
11. Compliance management process and statement of compliance from senior
decision maker: This disclosure requires the organizations to explain how the
organization manages to monitor its compliance in respect of regulatory and legal
requirements. There shall be a statement on the compliance status by the senior
decision maker, who shall be the chair, CEO or equivalent senior position.
12. Organisation registration certificate and other licenses and certifications (12A,
80G, FCRA, GST, etc.).
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Financial Disclosures
ICAI is in the process of publishing the uniform accounting and reporting framework
for NGO. However, the following disclosures shall be made by the NPO in respect of
Financial Aspects.
1. Financial Statement:
 Balance Sheet
 Income statement
 Cash Statement
 Program wise fund utilization certificate
 Percentage of organizational budget this ‘issue’ represents
 Breakup of organizational budget and expenditure
 Split of the budget across partners of the project/initiative is being jointly
executed
2. Auditors Report and details of the auditors
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Annexure II: Guidance notes for all Social Enterprises (SEs) on AIR
Strategic Intent and Planning
1. What is the social or environmental challenge the organization or the instrument
listed is addressing?
The problem statement to be explained in detail. The challenge, its extent, causes
and consequences and the part of the problem statement the organization and the
instrument are trying to address shall be explained.
2. How the organization is planning to attend to the challenge or attending to the
challenge?
The approach the organization or the specific instrument will be using or already
using need to be explained. The organization shall also explain what the change
is resulting for the targeted beneficiary and what proportion of the target group are
experiencing the change.
3. Who is being impacted (target segment)?
The target beneficiaries / stakeholders to cover various kinds of target groups.
Include the organization’s internal definition of “target segments” it seeks to serve,
usually along one or more of the three dimensions namely,
 Income (driven by socio-demographic and/or behavioural characteristics)
 Geography (ecosystem or geographic characteristics driven by population
density (urban/rural), administrative boundaries, terrain etc); and
 Thematic issue (gender, caste, community that places the target segment
at a disadvantage that has economic and non-economic consequences)
Where the target segment is a specific geographic region in its entirety, state so.
Thematic issues could be one or more of the following: Conservation of Resources,
Generation via renewable resources, Reduction in waste, Conservation (say of
land, wildlife, historical monuments, etc), Reduction in toxic substances.
Also, bring out possible deviations that might have occurred in the reporting period.
4. What will be the outcomes of the solution/program? Coverage should include
positive and potential unintended negative outcomes.
Describe the Theory of change / logic model framework (defining input, output(s),
outcome(s)) for the solution proposed. While identifying the targeted impact
segment, both positive and potential unintended negative impacts need to be
identified.
Approach
1. What is the baseline status / situation analysis / context description at the start of
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the activity, intervention, program or project?
The baseline measurement is done to establish the starting point in any activity,
intervention, program or project. The measurements give the depth of the
challenge and/or the spread of the challenge. The organization will establish the
right kind of measurements keeping the end or what the organization or instrument
wants to achieve since the baseline will be used to measure what actually changed
due to the intervention. In absence of baseline study, a detailed situation analysis
to be mentioned.
2. What has been the past performance trend?
For the on-going activity, intervention, program or project explain the key past
performance trends and for proposed activity, intervention, program or project the
narrative should explain the experience of similar programs in similar situations.
3. What is the solution implementation plan and the measures taken for sustainability
of program outcomes?
Detailed implementation plan to be mentioned capturing all the essential activities.
The interventions can be either perennial support or time bound support. In case
of time bound support, the organization shall explain the exit strategy and how it
ensures that the outcomes achieved will be sustained. In case of perennial support
also, the organization can explain how it ensures sustainability of the
project/program. Also, bring out possible deviations that might have occurred in the
reporting period.
4. Please brief out alignment of solution to Sustainable Development Goals
(SDGs)/national priorities/state priorities.
Explain the alignment of activity, intervention, program or project to respective
SDGs and national/state priorities and schemes.
5. How have you taken into consideration stakeholder feedback in this reporting
period?
The organization to mention how they have mapped and prioritized the key
stakeholders for the engagement. The reporting shall include the list of
stakeholders engaged, their feedback and how the organization used the
feedback.
6. In the last year, what have you seen as the biggest risks to the achievement of the
desired impact? How are these being mitigated?
Mention the key potential risks pertaining to the organization or the specific
instrument that could hamper/hinder the achievements of desired intended
outcomes in last year and the steps or strategies taken by organization to mitigate
the same.
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Impact Scorecard
1. What are the metrices monitored and what has been the trend?
The trend in performance shall be explained through the trend of the data across
the output, outcome and impact metrices that are established by the organization.
The metrices will capture the reach of the activity, intervention, program or project
as well as level of inclusiveness of impact being generated (direct, indirect,
extended). This shall help evaluate the delta change that has occurred in lives of
various target stakeholders (including environment) due to the solution. The
metrices monitored shall target to cover the reach, depth and inclusion.
Reach - Outreach metrics for target segment(s) served:
 Proportion of target segment(s) who have been reached in the reporting period
 Proportion of target segment(s) who accepted the organization`s solution
 What part of the planned activity, intervention, program or project have been
accomplished in the reporting period
 Cumulative reach (members of the target segment served since inception)
 Other suitable metrics in relation to the solution, usually relate to people,
institutions or activities (Ex: monthly active users of MAUs for an app/tech
platform). These can be considered as needed, where the target segment is
the specific geographic region.
Depth - The depth of impact on the median individual (of the target segment(s))
Surveys (1% of the customers/recipients or at least 200 respondents per
organization) asking respondents ‘Has your quality of life changed’, with response
options being: Very much improved, slightly improved, no change, got slightly
worse, got much worse.
Alternatively, SE can compare itself to different ‘case studies’ of High - Medium -
Low depth organizations.
Inclusion - The SE must consider for itself how its approach intends to improve
Inclusion for its customers / recipients, along one or more of the following themes.
 Theme 1: Net increase in Income levels of customers / recipients among target
segment(s), as decided by the organization. The organization can self-select
‘Low’, ‘Medium’ or ‘High’.
 Theme 2: Diversity and Inclusion: The SE exhibits how it prioritizes the inclusion
of these disadvantaged groups or communities (either as owners, partners or
customers) and empower them in their relationship with the SE over time.
 Theme 3: Social Equity: The SE exhibits how its approach has resulted in the
disadvantaged group or community experiencing increased social equity. This
can be through a survey as above or through qualitative criteria such as details
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of its strategy, processes and internal accountability/governance processes
that have resulted in an internal culture that values and works towards
achieving social equity for the disadvantaged group or community.
2. What are the highlights or achievements in the reporting period?
The organization to mention key highlights, achievements, challenges and/or
disappointments faced during the reporting period.
3. Beneficiary / Stakeholder validation
It is utmost necessary to capture the perspective of stakeholders for the program
to draw a holistic picture of impact/change that has been achieved by the program.
The stakeholder voices would also help in capturing information that will help
validate the impact claims. This can establish a check and avoid over claiming. The
validation process shall answer the following questions.
 What would have happened in the absence of this activity, intervention,
program or project?
 How much the activity, intervention, program or project contributed to the
changes that are evidenced?
 How much unintended negative impacts happened due to the activity,
intervention, program or project?
*****
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