Context:
The Securities and Exchange Board of India (SEBI) has proposed a new framework to enhance fundraising mechanisms for not-for-profit organisations (NPOs) through the Social Stock Exchange (SSE).
What is SSE-EBP?
- The Securities and Exchange Board of India (SEBI) has proposed a dedicated Social Stock Exchange Electronic Book Provider (SSE-EBP) platform to enable fundraising by Not-for-Profit Organisations (NPOs).
- It will streamline issuance of Zero Coupon Zero Principal (ZCZP) instruments and other SEBI-approved securities.
Key Features:
Applicability
- Mandatory for NPOs raising â‚ą50 lakh or more in a single or shelf issuance.
- Open to Qualified Institutional Buyers (QIBs), Non-Institutional Investors, and Retail Investors.
- Foreign Portfolio Investors (FPIs) are not allowed to participate.
Bidding & Allotment Mechanism
- Bidding through an anonymous pooling system from 9 AM to 5 PM on working days, aligned with stock exchange timings.
- Allotment will follow first-come-first-serve (FCFS) or pro-rata basis.
Issuer Responsibilities
Issuers must file a Draft Fund Raising Document (DFRD) and Term Sheet outlining:
- Issue size
- Project details
- Bid terms
- Minimum application size
- Mode of allotment
Submission deadlines: - 2 days prior to issue for repeat issuers
- 5 days prior for first-time issuers
Penalties for Non-compliance
- Successful bidders who fail to make payment face a 30-day debarment.
- Issuers withdrawing issues without valid reason face a 7-day debarment unless exceptions apply (e.g., <75% subscription).
Objective and Benefits
- The platform aims to improve transparency, standardisation, and access to social sector funding.
- Aligns NPO fundraising with capital market infrastructure.
- Promotes confidence among institutional and retail investors.
