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A SEBI committee has proposed reducing the threshold of the minimum issue size for not-for-profit organisations (NPOs) issuing Zero Coupon Zero Principle Instrument (ZCZP) on social stock exchanges to ₹50 lakh from ₹1 crore. It has proposed that the minimum application size may be reduced to ₹10,000 from ₹2 lakh currently.
“SSE is at an initial stage and NPOs may find it difficult to raise ₹1 crore from a limited set of investors. Lowering the minimum application size threshold will help large number of investors who may like to subscribe to ZCZP of more NPOs,” the proposals said.
The requirement of valid 80G certificate for NPOs may not be mandated for them to seek registration with SSE, the proposals said.
The committee has recommended that NPOs having notice or ongoing scrutiny by the income tax department may be permitted on SSE if details on pending notices and fines are disclosed at the time of making the application. SSEs will have the right to refuse registration if the notices are grave.
The committee has recommended that the term social auditor be changed to social impact assessor. The regulator has sought feedback till September 19.
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