Securities and Exchange Board of India (SEBI) has reduced the minimum investment amount for Zero Coupon Zero Principal (ZCZP) instruments on the Social Stock Exchange (SSE) from ₹10,000 to ₹1,000. This move aims to increase retail participation in social impact investments and boost funding for non-profit organizations (NPOs) listed on the SSE.
Key Highlights
Zero Coupon Zero Principal (ZCZP) Instruments:
- ZCZP Instruments are investment tools that allow individuals to donate funds to NPOs without expecting any financial returns.
- This initiative seeks to mobilize philanthropic capital for organizations working toward social causes, such as education, healthcare, and community development.
Objective of SEBI’s New Rule:
Based on recommendations from the Social Stock Exchange Advisory Committee and public feedback, SEBI revised the minimum application size for subscribing to ZCZP instruments from ₹10,000 to ₹1,000.
This change aims to:
- Enhance Retail Participation: Encourage smaller investors to contribute to social enterprises.
- Increase Funding for Social Causes: Create new opportunities for funding organizations driving positive social change.
Enhanced Access to Social Investments
- By lowering the investment threshold, SEBI seeks to democratize social impact investing.
- More small investors will now be able to contribute toward meaningful causes through the SSE, boosting the flow of funds to social enterprises.
Immediate Implementation of New Rules
- SEBI confirmed that the revised minimum investment rules will be implemented immediately, enhancing accessibility for retail investors on the SSE platform.
About Social Stock Exchange (SSE)
Proposed By: Finance Minister Nirmala Sitharaman in the Union Budget 2019-20.
Purpose:
- To connect social enterprises with investors and donors.
- To provide a structured framework for the funding and growth of social enterprises.
- To ensure transparency in impact and financial reporting.
Operational Model: The SSE is a platform within existing stock exchanges (like BSE and NSE) designed to facilitate funding for social enterprises, non-profits, and other organizations contributing to social impact. It helps promote accountability, transparency, and efficiency in social impact financing.