The committee will develop a framework for onboarding profit and non-profit organisations on such bourses and prescribe disclosure requirements relating to financials and governance.
Tyagi also offered some sage advise to mutual funds by saying that they should remember the difference between “investing” and “lending”.
Sebi has set-up a technical committee on the social stock exchange, which will develop a framework for onboarding profit and non-profit organisations on such bourses and prescribe disclosure requirements relating to financials and governance.
The committee will also prescribe disclosure requirements relating to performance and dwell upon aspects related to social impact and social audit, Sebi said in a statement on Monday.
The decision of setting-up of the technical group has been taken following the recommendation of the working group (WG) on the social stock exchange (SSE).
The technical group would be chaired by Harsh Kumar Bhanwala, former chairman of NABARD.
Other members of the group include Ingrid Srinath, founder-director, Centre for Social Impact and Philanthropy at Ashoka University; Pushpa Aman Singh CEO of Guidestar; and Santhosh Jayaram, Partner and Head- Sustainability and CSR Advisory at KPMG.
In addition, Roopa Kudva, managing director of Omidyar Network India (Social Impact Investor; part of Omidyar Group), Shaji Krishnan V, Deputy Managing Director of NABARD, Sanjeev Singhal, chairman of sustainability reporting standards board at ICAI, representatives of BSE, NSE and Sebi will be part of the technical group.
Earlier, working group (WG) on the social stock exchange, chaired by Ishaat Hussain submitted its report on June 1, 2020.
The working group has outlined its vision and made high-level recommendations which include the participation of non-profit organisations (NPOs) and for-profit enterprises (FPEs) on social stock exchanges subject to committing to minimum reporting requirements.
Additionally, it recommended the standardisation of financial reporting by non-profit organisations on such bourses.
Besides, a direct listing of non-profit organisations through the issuance of bonds and a range of funding mechanisms, which include some of the existing mechanisms such as Social Venture Funds under the Alternative Investment Funds, has been recommended by the working group.
The SSE can be housed within the existing stock exchange such as the BSE and/or National Stock Exchange (NSE).
This would help the SSE leverage the existing infrastructure and client relationships of the exchanges to onboard investors, donors, and social enterprises (for-profit and nonprofit), the WG said in its report.
“In terms of the recommendations of the WG, there is a need to develop the framework for onboarding NPOs and FPEs on the SSE including defining for-profit social investing / enterprises, prescribe disclosure requirements relating to financials, governance, performance etc and dwell upon aspects related to social impact, social audit, information repositories etc,” Sebi said.
To develop and make recommendations on these aspects, the regulator has constituted the technical group.
The technical group may, if it so desires, seek consultation from other experts as special invitees, it added.
The social stock exchange is a novel concept in the country and such a bourse is meant to serve private and non-profit sector providers by channelling greater capital to them.