Quick summary
SEBI has eased Social Stock Exchange (SSE) norms. Not for Profit Organizations (NPOs) can now extend their registration without fund-raising up to three years. Additionally, the minimum subscription requirement for Zero Coupon Zero Principal (ZCZP) instruments is reduced from 75% to 50%, subject to viability and specific disclosure requirements.
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Who is affected
The circular is addressed to:
- All Recognized Stock Exchanges
- All Recognized Depositories
- All Merchant Bankers and Brokers registered with SEBI
- All Social Enterprises
- All Social Impact Funds registered with SEBI
- All Social Impact Assessment Firms
- The Institute of Chartered Accountants of India (ICAI)
- The Institute of Company Secretaries of India (ICSI)
- The Institute of Cost Accountants of India (ICMAI)
What changes
- NPO Registration Period Extension: An NPO can register on an SSE and remain registered without raising funds for two years from the registration date. This period can be extended by one additional year subject to approval by the SSE (allowing up to three years total without fund raising).
- ZCZP Minimum Subscription Reduction: The minimum subscription required to be achieved for the issuance of Zero Coupon Zero Principal (ZCZP) instruments is reduced from 75% to 50%, provided the funds raised can be deployed in a viable and meaningful manner aligned with the disclosed object of the issue.
- Under-subscription Disclosures: In case of under-subscription, the NPO must disclose specific details in its fund raising document regarding:
- The manner of raising balance capital if the minimum subscription achieved is 75% or 50%.
- The possible impact on achieving social objectives if the under-subscription is not arranged.
- Refund Mandate: Funds must be refunded if the minimum subscription (75% or 50%, as the case may be) is not achieved.
Action items
- For NPOs preparing fund raising documents (in case of under-subscription): Provide explicit details on the manner of raising balance capital (whether minimum subscription achieved is 75% or 50%) and the possible impact on achieving social objectives if the balance capital is not arranged.
- For NPOs failing to meet minimum subscription: Refund the funds if the minimum subscription (75% or 50%, as applicable) is not achieved.
- For Social Stock Exchanges: Prior to granting in-principle approval for partial fund raising, undertake due-diligence to satisfy themselves that the funds raised are capable of being deployed in a meaningful manner, considering the subscription scenarios disclosed in the Fund Raising Document.
Key dates-deadlines
- Effective Date: The circular shall come into effect immediately (April 15, 2026).
Source reference
- SEBI Circular Reference: HO/49/14/(10)2026-CFD-POD1/I/9380/2026
- Date: April 15, 2026
- Source Website: www.sebi.gov.in