On Monday, the Securities and Exchange Board of India (Sebi) instructed social enterprises involved with the social stock exchange (SSE) to furnish an 'annual impact report' for the fiscal year 2023-24 to the exchange by the end of October.
The annual impact report for SSE encompasses both qualitative and quantitative assessments of the social impact generated by the respective social enterprise. For Not for Profit Organisations (NPOs) solely registered without listing any securities, the report should encompass significant activities, interventions and programmes, among other aspects.
"Social enterprises that have registered or raised funds through SSE must submit their Annual Impact Report to SSE by 31 October 2024, for the Financial Year 2023-24," stated Sebi in a circular.
In September 2023, Sebi had mandated social enterprises utilising SSE to disclose their annual impact reports within 90 days from the conclusion of the financial year.
In order to evaluate the societal impacts of social activities undertaken by social enterprises, Sebi has designated additional agencies, including ICMAI Social Auditors Organisation 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 within the SSE framework.
These entities are authorised to serve as platforms for registering social auditors, in addition to the SRO mentioned under the Institute of Chartered Accountants of India (ICAI) for social impact assessors.
A social impact assessor refers to an individual registered with a self-regulatory organisation under the Institute of Chartered Accountants of India or another such agency, who has completed a certification program conducted by the National Institute of Securities Market (NISM).
The SSE represents an innovative concept in India, constituting a distinct segment within the existing stock exchange framework, facilitating social enterprises in raising funds from the public via the stock exchange mechanism.
Social enterprises eligible to participate in the SSE encompass entities such as NPOs and for-profit social enterprises, whose primary goal is social intent and impact. This intent should be evident through their focus on eligible social objectives aimed at underserved or less privileged populations or regions.
These enterprises are required to engage in social activities within 16 broad categories stipulated by the regulator. Eligible activities include eradicating hunger, poverty, malnutrition and inequality; promoting healthcare, supporting education, employability, and livelihoods; advocating for gender equality and empowering women and LGBTQIA+ communities and fostering the development of social enterprise incubators.
