Synopsis
Sebi on Monday proposed a sharp reduction in the minimum investment required from individual investors in social impact funds to Rs 1,000 from the existing Rs 2 lakh, in a move aimed at widening retail participation and easing fundraising for not-for-profit organisations (NPOs) on the Social Stock Exchange (SSE).
PTI Sebi on Monday proposed a sharp reduction in the minimum investment required from individual investors in social impact funds to Rs 1,000 from the existing Rs 2 lakh, in a move aimed at widening retail participation and easing fundraising for not-for-profit organisations (NPOs) on the Social Stock Exchange (SSE).
In its consultation paper, Sebi also proposed extending the registration period for NPOs on the SSE without fundraising and lowering the minimum subscription requirement for issuing Zero Coupon Zero Principal Instruments (ZCZP).
The regulator said the measures are intended to “further strengthen the SSE framework, facilitate ease of fund raising and encourage greater participation by NPOs”.
Under the current Alternative Investment Fund (AIF) Regulations, individual investors are required to invest a minimum of Rs 2 lakh in a social impact fund that invests exclusively in securities of NPOs listed or registered on the SSE.
Sebi has now proposed lowering this threshold to Rs 1,000 to align it with the existing minimum application size for Zero Coupon Zero Principal Instruments (ZCZP) under the ICDR norms, thereby enabling wider retail participation in social impact investments.
On the registration front, Sebi has suggested extending the period during which NPOs can remain registered on the SSE without raising funds from the existing two years to three years.
The proposal has taken into account practical challenges faced by NPOs, including delays in statutory and regulatory approvals, and would be subject to appro
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