TaxTMI 
TaxTMI 
Master Circular for Framework on Social Stock Exchange (SSE)
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....enable the stakeholders to have access to all applicable circulars in the subject matter at one place, this Master Circular is issued, which is a compilation of all the circulars issued with respect to Social Stock Exchange. 3. With the issuance of this Master Circular, all directions/instructions contained in the circulars listed out in the Appendix to this Master Circular shall stand rescinded to the extent they relate to the framework for Social Stock Exchange. 4. Notwithstanding such rescission, - (a) anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; (b) any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular; and (c) the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, ....
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.... Full Form AIR Annual Impact Report AoA Article of Association ASBA Application Supported by Blocked Amount Board Securities and Exchange Board of India FCRA Foreign Contribution Regulation Act GST Goods and Services Tax ICAI Institute of Chartered Accountants of India ICMAI Institute of Cost Accountants of India ICSI Institute of Companies Secretaries of India IT Income Tax MoA Memorandum of Association NPO Not for Profit Organization PAN Permanent Account Number SDG Sustainable Development Goals SE Social Enterprise SGC Social Stock Exchange Governing Council SSE Social Stock Exchange ZCZP Zero Coupon Zero Principal Instrument Chapter I - Framework on Social Stock Exchange ('SSE') 1. Pursuant to amendments in SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") and SEBI (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations"), a detailed framework on SSE is specified as under:^[1] 1.1. Minimum requirements to b....
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....61 Valid 80G registration under Income Tax Act, 1961 for entities registered under section 12A/ 12AA/ 12AB of the Income-tax Act, 1961. Entity to ensure whether tax deduction is available or not to investors.]^[4] Eligible to be Social Enterprise Requirements with Regulation 292E of ICDR v Regulations As may be specified by SSE Minimum Fund Flows Annual Spending Financial Year Receipts or Payments from Audited accounts/ Fund Must be at least Rs.50 lakh Funding in the past Financial Year Receipts from Audited accounts/ Must be at least Rs.10 lakhs 1.2. [Procedure for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by an NPO 1.2.1. The NPO shall file the draft fund raising document with the SSE where it is registered along with the fees as specified by the SSE and an application seeking in-principle approval for listing of its ZCZP on the SSE: Provided that SSE shall specify the details to be incorporated in the fund raising document. 1.2.2. The draft fund raising document shall be made available on the website of SSE and the NPO for a period of at least 21 days for public comments. 1.2.3. The SSE....
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....to issue procedure.]^[6] 1.5. Minimum Initial Disclosure Requirement for NPOs raising funds through the issuance of ZCZP in terms of [Regulation 292K]^[7] of the ICDR Regulations 1.5.1. SSE under the guidance of SSE Governing Council (SGC) mandated the structure of the draft fund raising document/ final fund raising document. SSE hosts such requirements on its website. 1.5.2. SSE is required to ensure that the documents contain the following minimum disclosures: a. Vision Organisation's activities, interventions and programmes are in line with aims and objects stated in its constitution. b. Target Segment Organisation has defined its target segment and reach to accomplish its planned activities. Clear identification and understanding of the target segment (those affected by the problem and how are they affected). The NPO must disclose how its approach intends to improve inclusion for its customers / recipients c. Strategy Strategy formulation towards accomplishing vision should take into account capabilities and learning from challenges. d. Governance Organisation has a governing body a....
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....tions (Including Employee and Volunteer strength); b) Disclosures on Governance aspects: i. Ownership and legal form; ii. Governance Structure (outlines board and management committee structures, mandates, membership, charters, policies and internal controls); iii. Details of governing body including names of the members of the body; iv. Executives with key responsibilities; v. Number of meetings by governing body and other committees formed by them along with attendance and the process of performance review; vi. Organisation level potential risks and mitigation plan; vii. Mechanisms for advice and concerns about ethics, along with conflict of interest and communicating other critical concerns viii. Remuneration Policies; ix. Stakeholder grievance, process of grievance redressal and number of grievance received and resolved; x. Organisation registration certificate and other licenses and certifications (12A, 80G, FCRA, GST, etc.). 1.6.2. The following disclosures would be made by the NPOs on an Annual Basis of the Financial Year by October 31st of each year or before the due ....
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....am expenditure in the previous Financial Year.]^[11] 1.7.4. For a Social Impact Fund where the underlying recipients of funds are Social Enterprises which have registered or raised funds using SSE, must disclose an overall AIR for the fund covering all investee/grantee organizations where the fund is deployed. 1.7.5. The AIR should at a minimum, cover the aspects described below. a) Strategic Intent and Planning i. What is the social or environmental challenge the organization and/or the instrument listed is addressing? Has this changed in the last year? ii. How is the organization attending to the challenge or planning to attend to the challenge? Has this changed in the last year? iii. Who is being impacted (target segment)? Has this changed in the last year? iv. What will be the outcomes of the activities, intervention, programs or project? Disclosure should include positive and potential unintended negative outcomes. b) Approach i. What is the baseline status / situation analysis / context description at the start of the activity/intervention/programs or project and at the end of the last reporting ....
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....ontext of Social Stock Exchange: 3.1. ICMAI Social Auditors Organization (ICMAI SAO) under the Institute of Cost Accountants of India. 3.2. ICSI Institute of Social Auditors (ICSI ISA) under the Institute of Company Secretaries of India. Chapter III - Governing Council for Social Stock Exchange Governing Council for Social Stock Exchange^[14] 4. As per Regulation 292D of the ICDR Regulations, every SSE shall constitute a Social Stock Exchange Governing Council (SGC) to have an oversight on its functioning, with composition and terms of reference as specified by the Board. Aspects related to the SGC are specified below: 4.1. Composition of SGC: 4.1.1. The SGC shall comprise of individuals with relevant expertise who can contribute to the development of SSE. It shall have a balanced representation, drawing from various categories of stakeholders such as: a) Philanthropic and social sectors including public / private sector donors, b) Non-profit organizations c) Information Repositories d) Social Impact Investors e) Social Audit Profession / self-regulatory organization for social auditors, f)....
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.... be specified. Location of operations shall cover the name of the locations where the organization has significant operation. Significant shall be defined to the scope of fund raising document. 1.3. Vision/Mission/ Purpose: It is important to understand the intent behind the disclosure and respond accordingly. Purpose in this context is why the organization exists and explaining why the cause taken up by the organization matters. The Mission will explain how the organization is working in the context of the purpose and the Vision in the context of this disclosure will be about where the organization is headed and what the organization will achieve. It is possible that all organizations may not have all the 3 (Vision, mission and purpose) as a stated document. 1.4. Organizational goals, activities, Products and Services: The reporting organization shall mention overall objectives of the organization or activity/intervention/programs or project listed. It shall also describe the organization activities, including any products and services which the organization provides. 1.5. Outreach of organization: Organization to mention type and number of dire....
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....r the governance body and the organization hierarchy for decision making. It outlines board and management committee structures, mandates, membership, charters, policies and internal controls. 2.3. Details of governing body including names of the members of the body: The organization shall explain the role of the governance body, the competence available and the identification of the members including name. Also name and designation of the senior decision maker may be provided. 2.4. Executives with key responsibilities: The disclosure will highlight the key executive positions and their role in the organization. 2.5. Number of meetings by governing body and other committees formed by them along with attendance and the process of performance review: The process to acquire the necessary information and data by the governance body to review the performance of the organization shall be explained. The disclosure shall also bring out the number of such meetings held by the governance body, during the course of the reporting period. 2.6. Organisation level potential risks and mitigation plan: The organization to describe potential risks and ....
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.... a) Balance Sheet b) Income statement c) Cash Statement d) Program wise fund utilization certificate e) Percentage of organizational budget this 'issue' represents f) Breakup of organizational budget and expenditure g) Split of the budget across partners of the project/initiative is being jointly executed 3.1.2. Auditors Report and details of the auditors Annexure II Guidance notes for all Social Enterprises on Annual Impact Report 1. Strategic Intent and Planning 1.1. What is the social or environmental challenge the organization or the instrument listed is addressing? The problem statement to be explained in detail. The challenge, its extent, causes and consequences and the part of the problem statement the organization and the instrument are trying to address shall be explained. 1.2. How the organization is planning to attend to the challenge or attending to the challenge? The approach the organization or the specific instrument will be using or already using need to be explained. The organization shall also explain what the change is resulting for the targeted beneficiary and what ....
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....t the narrative should explain the experience of similar programs in similar situations. 2.3. What is the solution implementation plan and the measures taken for sustainability of program outcomes? Detailed implementation plan to be mentioned capturing all the essential activities. The interventions can be either perennial support or time bound support. In case of time bound support, the organization shall explain the exit strategy and how it ensures that the outcomes achieved will be sustained. In case of perennial support also, the organization can explain how it ensures sustainability of the project/program. Also, bring out possible deviations that might have occurred in the reporting period. 2.4. Please brief out alignment of solution to Sustainable Development Goals (SDGs)/national priorities/state priorities. Explain the alignment of activity, intervention, program or project to respective SDGs and national/state priorities and schemes. 2.5. How have you taken into consideration stakeholder feedback in this reporting period? The organization to mention how they have mapped and prioritized the key stakeholders for the engagement. The reporting shall include the ....
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....for itself how its approach intends to improve Inclusion for its customers / recipients, along one or more of the following themes. a) Theme 1: Net increase in Income levels of customers / recipients among target segment(s), as decided by the organization. The organization can self-select 'Low', 'Medium' or 'High'. b) Theme 2: Diversity and Inclusion: The SE exhibits how it prioritizes the inclusion of these disadvantaged groups or communities (either as owners, partners or customers) and empower them in their relationship with the SE over time. c) Theme 3: Social Equity: The SE exhibits how its approach has resulted in the disadvantaged group or community experiencing increased social equity. This can be through a survey as above or through qualitative criteria such as details of its strategy, processes and internal accountability/governance processes that have resulted in an internal culture that values and works towards achieving social equity for the disadvantaged group or community. 3.2. What are the highlights or achievements in the reporting period? The organization to mention key highlights, achievements, challenges a....
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.... a charitable trust registered under the public trust statute of the relevant State; b) a charitable trust registered under the Societies Registration Act, 1860; c) a charitable trust registered under the Indian Trust Act, 1882; d) a company incorporated under Section 8 of the Companies Act, 2013; [3] Substituted with the issuance of SEBI Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/196 dated December 28, 2023. Prior to its substitution it read as under: Broad Parameter Indicator Details Legal Requirements "Exemption under Income Tax Act Registration Certificate under section 12A/ 12AA/ 12AB under Income Tax Act. 1961 Registration Certificate under section 12A/12AA/ 12AB to be valid for at least the next 12 months. Does not have a notice or ongoing scrutiny by Income Tax. [4] Substituted with the issuance of SEBI Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/196 dated December 28, 2023. Prior to substitution it read as under: Broad Parameter Indicator Details Legal Requirements "Deduction under Income Tax Act, 1961 Valid 80G registration under Income Tax Act, 1961. Entity to ensure whether tax deduction is availabl....