Stocks

Social stock exchange takes shape

Our Burea Mumbai | Updated on June 01, 2020 Published on June 01, 2020

SEBI seeks public comments by June 30

An expert panel constituted by SEBI to set up a social stock exchange (SSE) has recommended exemption of securities transaction tax (STT) and capital gains tax for social enterprises and voluntary organisations which get listed on this platform. The exchange will function as an electronic fund-raising platform for social purpose organisations (SPOs).

The 15-member expert panel under the chairmanship of Tata group veteran Ishaat Hussain was constituted by SEBI in September last year following a Union Budget proposal in July.

SSEs are used globally for making impact investments with the objective of achieving certain social goals. SEBI has sought public comments on the recommendations.

Besides, the panel has also recommended philanthropic donors be made eligible to claim 100 per cent tax exemption, and first-time retail investors be allowed to avail 100 per cent tax exemption on their investments in the SSE mutual fund structure, subject to an overall limit of ₹1 lakh.

The panel has suggested various models for introducing SSEs in the country. These include 1) matchmaking platforms, and alternative investment instruments listed on an existing stock exchange.

The expert group has also recommended that the SSE be housed within the BSE or the NSE to enable leveraging of the existing infrastructure and client relationships. Also proposed is ₹100 crore for a “capacity building fund” that will foster overall sector development.

The regulator seeks public comments on the subject till June 30.

Published on June 01, 2020

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