Social Stock Exchange (SSE) . The DHAN Academy

The Social Stock Exchange (SSE) is a platform designed to facilitate funding for social enterprises and voluntary organizations by enabling them to raise capital through stock markets. It allows non-profit and for-profit social enterprises to access investment from individuals and institutions interested in supporting social causes. The SSE connects social impact-driven entities with investors, promoting transparency and accountability in the social sector.

The SSE was first conceptualized in India under the Securities and Exchange Board of India (SEBI), which approved guidelines in 2021. Eligible organizations must demonstrate measurable social impact, and the funds raised can be used for initiatives in sectors like healthcare, education, and environmental sustainability. The SSE functions like a traditional stock exchange, but with a focus on funding projects that address societal challenges, thus blending financial returns with social outcomes.

1. Presented by: Rakesh , Manikandan, Rajesh, Gayathri

2. What is a Social Stock Exchange (SSE)? Social Stock Exchange (SSE) is a separate segment of the existing Stock Exchange, that can help Social Enterprise(s) to introduce funds from general public via stock exchange system. SEBI (Securities and Exchange Board of India) has been working on creating an SSE framework for India. National Stock Exchange – 66 NGO’s Bombay Stock Exchange -57 NGO’s

3. Stock Exchange Vs Social Stock Exchange (SSE) Feature Stock Exchange (SE) Social Stock Exchange (SSE) Objective Facilitate capital raising and trading for profit-driven companies Mobilize funds for organizations focused on social and environmental impact Listed Entities For-profit companies (e.g., corporations, SMEs, startups) Social enterprises, NGOs, non-profits, Section 8 companies Focus Profit maximization for shareholders Social and environmental impact creation Types of Securities Shares, bonds, derivatives, etc. Social impact bonds, grants, donations, etc. Primary Participants Institutional and retail investors Social investors, philanthropists, impact investors Regulatory Body Securities and Exchange Board of India (SEBI) Securities and Exchange Board of India (SEBI) Return Expectation Financial return (capital appreciation, dividends) Social return (impact measurement) with or without financial return Examples Bombay Stock Exchange (BSE), National Stock Exchange (NSE) Currently in development (SSE under BSE and NSE) Market Type Profit-driven capital market Impact-driven capital market Inception Long established (BSE in 1875, NSE in 1992) Conceptualized in 2020, launched in 2023 (early stages of development)

4. Purpose and Mission To help social enterprises access capital for social impact. Provide a transparent platform for investors interested in impact investing. Enhance social value by creating measurable social change alongside financial returns.

5. Eligibility Criteria

6. List of eligible activities for demonstrating primacy of Social Impact

7. Entities Excluded Corporate foundations. Political or religious organizations or activities. Professional or trade associations. Infrastructure, and housing companies, except affordable housing.

8. Registration and Listing Process

9. Benefits of Registration/Listing Improved market access  Synergy between investors and investee in social aims  Minimal registration cost  Additional avenue for Social Enterprises 

10. How the SSE Works 1.Registration of social enterprises: They need to meet criteria set by SSE. 2.Due Diligence: SSE verifies their social and financial goals. 3. Listing: Approved enterprises list their stocks or bonds. 4 . Fundraising: Social enterprises raise funds through bonds, or grants. 5. Reporting: Enterprises regularly report on their social impact and financial performance.

11. Financial Instruments on SSE Social Impact Bonds (SIBs) Development Impact Bonds (DIBs) Grants and Donations Zero-Coupon Zero Principal Bonds

12. Reporting Standards Financial Reporting: Regular updates on financial health similar to traditional stock exchanges. Social Impact Reporting: Reports must include data on key performance indicators (KPIs) related to social outcomes. Importance of Transparency: Ensures that investors and stakeholders are informed about the dual bottom-line performance (financial and social).

13. Benefits for Investors Opportunity to invest in projects with a measurable social impact. Combining financial returns with social impact. Transparent access to performance reports.

14. SSE Globally

15. Challenges Faced by SSE Lack of Awareness: Many social enterprises and investors are unaware of SSE opportunities. Measuring Social Impact: Quantifying social returns can be difficult. Regulatory Framework: SSEs require a robust governance framework. Limited Investor Base: Social impact investing is still a niche market.

16. Regulatory Oversight Who Regulates the SSE? SSEs are regulated by local financial authorities (e.g., SEBI in India). Importance of Regulation: Ensures transparency and accountability. Protects investors and ensures funds are used appropriately.

17. Investor Motivation in SSE Why Investors Choose SSE: Alignment of values: Many investors want to support causes they care about. Ethical investing : It’s not just about profits but about making a difference. Long-Term Benefits: Sustainable investment: Fostering a long-term positive social change.

18. Future of Social Stock Exchanges Trends: Growing demand for impact investing. Increased participation from institutional investors. Improved technology and reporting tools to measure impact. What to Expect: More SSEs will emerge globally as impact investing becomes mainstream.

19. How to Get Involved For Social Enterprises: Apply for registration and listing. Focus on measurable social impact. For Investors: Research listed enterprises. Diversify investment portfolios with a social impact focus.

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