The Securities and Exchange Board of India (SEBI) on November 25 cut the minimum issue size for non-profit organisations (NPOs) on the Social Stock Exchange (SSE) by half.
The press statement from Sebi, following the Board meeting, said that the minimum issue size in case of public issuance of zero-coupon zero principal instruments (ZCZP) by non-profit organisation (NPOs) on SSE has been reduced to Rs 50 lakh from Rs 1 crore.
It said that this has been done to provide impetus to fund raising by not-for-profit organisations on the SSE.
The regulator has also reduced the minimum application size in case of public issuances through ZCZP by the organisations on SSE to Rs 10,000 from the previous Rs 2 lakh, to enable a wide participation of subscribers including retail.
Sebi has also changed the nomenclature of "social auditor" with "social impact assessor" to provide comfort to the organisations and convey a positive approach to the social sector.
The market regulator had said in its consultation paper released on August 29 that the exchange was at an initial stage and NPOs might find it difficult to raise Rs 1 crore from a limited set of investors.
“The investors are also not aware of the framework and therefore not be easy for such NPOs to find investors to raise Rs 1 crore,” the consultation paper had said.
Sebi also announced that the minimum application size for NPOs would be reduced to Rs 10,000 from Rs 2 lakh. SEBI said lowering the minimum application size threshold would help a large number of investors who want like to subscribe to Zero Coupon Zero Principal Instruments of more NPOs. The minimum application size of Rs 2 lakh could be too large for people who donate on a regular basis.
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