The government has designated “zero coupon zero principal instruments” as securities in preparation for the creation of a social stock exchange. A Not for Profit Organization (NPO) that will be registered with the social stock exchange segment of a recognised stock exchange will issue a zero coupon, zero principal instrument. According to a formal announcement released on Friday, the Securities and Exchange Board of India (Sebi) will establish the laws that would apply to these instruments.
- The Social Stock Exchange (SSE), a revolutionary idea in India, aims to benefit private and nonprofit sector providers by increasing their access to money.
- Nirmala Sitharaman, the finance minister, proposed the concept in her Budget Speech for 2019–20.
- SSE will be a distinct division of the current stock markets.
- According to the notification, “zero coupon zero principal instruments” have been designated as securities for the purposes of the Securities Contracts (Regulation) Act, 1956.
- Sebi’s board approved a framework for SSE for social businesses to raise money in September 2021.
- The recommendations of a working group and technical group assembled by the regulator served as the foundation for the development of the SSE framework.
Important Takeaways For All Competitive Exams:
- Finance minister, Govt of India: Nirmala Sitharaman