SEBI Reduces Minimum Investment in SSE to ₹1,000

The 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 decision, based on recommendations from the Social Stock Exchange Advisory Committee, aims to enhance retail participation and increase funding for non-profit organizations (NPOs). The move is expected to channel more capital into sectors such as education and healthcare, strengthening India’s social impact investment framework. The change modifies SEBI’s previous directive from September 19, 2022, and comes into effect immediately.

Key Highlights

Reduction in Investment Limit

• SEBI has lowered the minimum investment size for ZCZP instruments from ₹10,000 to ₹1,000.
• Aims to boost small-scale investor participation in social impact projects.

Zero Coupon Zero Principal (ZCZP) Instruments

• ZCZP instruments are donation-based financial tools used to fund NPOs listed on the SSE.
• Investors do not receive interest or principal repayment but contribute directly to social causes.

Implementation and Amendments

• This revision modifies SEBI’s circular from September 19, 2022, which was previously updated on December 28, 2023.
• The change takes immediate effect as per SEBI’s latest directive.

Encouraging Retail Participation

• Lowering the threshold allows smaller investors to contribute, expanding the pool of social impact funding.
• Expected to increase financial support for NPOs working in education, healthcare, and social welfare.

Social Stock Exchange (SSE) Overview

• Introduced in Union Budget 2019-20 by Finance Minister Nirmala Sitharaman.
• Functions as a separate segment within existing stock exchanges to connect social enterprises with donors and investors.
• Facilitates funding growth for social enterprises while ensuring transparency and impact assessment.

SEBI’s Vision for SSE

• Strengthens India’s social finance ecosystem by formalizing funding channels for social impact projects.
• Ensures high standards of financial and impact reporting for social enterprises.