SEBI Reduces Minimum Investment in Social Stock Exchange Instruments to Rs 1,000.
Banking & Finance
On March 19, 2025, the Securities and Exchange Board of India (SEBI) revised the minimum investment threshold for Zero Coupon Zero Principal (ZCZP) instruments on the Social Stock Exchange (SSE) from Rs 10,000 to Rs 1,000. This change, effective immediately, aims to encourage retail investors to support Non-Profit Organizations (NPOs) in sectors like education and healthcare.
- The investment reduction makes ZCZP instruments more affordable for smaller investors. SEBI's objective is to increase capital flow to NPOs by encouraging retail investors to participate in funding social projects.
- The decision aligns with Section 11 and Section 11A of the SEBI Act, 1992, and Regulation 299 of the SEBI ICDR Regulations. It is part of a continued effort to promote the SSE, following previous adjustments made in November 2023, which lowered the minimum issue size for ZCZP from Rs 1 crore to Rs 50 lakh and the application size from Rs 2 lakh to Rs 10,000.
- The change also amends SEBI's circular from September 19, 2022, updated on December 28, 2023. This reform is based on recommendations from the public and the Social Stock Exchange Advisory Committee, chaired by Dr. R. Balasubramaniam.
Main Point :- (i) The SSE, introduced in the Union Budget 2019-20, is a dedicated segment under existing stock exchanges to connect social enterprises with donors and investors. Its purpose is to channel funds to NPOs and for-profit social enterprises (FPSEs) while ensuring transparency through impact assessment reports and financial disclosures.
(ii) ZCZP instruments are donation-based financial instruments where investors fund NPOs without expecting interest or principal repayment. They are issued only by SSE-listed NPOs, with funds used for predefined social welfare projects, and have a minimum maturity period of 5 years as per SEBI norms.
Chairperson: Tuhin Kanta Pandey
Headquarter : Mumbai
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