Explain the structure and functioning of India’s Social Stock Exchange. How does it differ from traditional capital markets? Examine how Social Stock Exchange can transform NGO credibility and funding transparency.
Kartavya Desk Staff
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Inclusive growth and issues arising from it.
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Inclusive growth and issues arising from it.
Q5. Explain the structure and functioning of India’s Social Stock Exchange. How does it differ from traditional capital markets? Examine how Social Stock Exchange can transform NGO credibility and funding transparency. (15 M)
Difficulty Level: Medium
Reference: TH
Why the question Bengaluru-based Unnati Foundation, a not-for-profit organisation working towards making the Indian youth workforce- ready, was the first NGO to be listed on the NSE and BSE Social Stock Exchange Key demand of the question The question demands a detailed explanation of how the Social Stock Exchange is structured and operates, a comparison with traditional stock exchanges, and an analysis of its role in enhancing NGO transparency and credibility. Structure of the Answer: Introduction Briefly introduce SSE as a SEBI-regulated initiative for fundraising by NGOs through innovative non-return instruments. Body Structure and functioning of SSE – Mention regulatory control, eligibility, ZCZP instruments, compliance norms. Difference from traditional capital markets – Highlight differences in investor type, returns, instruments, and purpose. Impact on NGO credibility and transparency – Analyse improvements in audit trail, donor trust, compliance, and CSR alignment. Conclusion Assert how SSE can professionalise NGO funding and suggest the need for expanding public awareness and institutional support.
Why the question Bengaluru-based Unnati Foundation, a not-for-profit organisation working towards making the Indian youth workforce- ready, was the first NGO to be listed on the NSE and BSE Social Stock Exchange
Key demand of the question The question demands a detailed explanation of how the Social Stock Exchange is structured and operates, a comparison with traditional stock exchanges, and an analysis of its role in enhancing NGO transparency and credibility.
Structure of the Answer:
Introduction Briefly introduce SSE as a SEBI-regulated initiative for fundraising by NGOs through innovative non-return instruments.
• Structure and functioning of SSE – Mention regulatory control, eligibility, ZCZP instruments, compliance norms.
• Difference from traditional capital markets – Highlight differences in investor type, returns, instruments, and purpose.
• Impact on NGO credibility and transparency – Analyse improvements in audit trail, donor trust, compliance, and CSR alignment.
Conclusion Assert how SSE can professionalise NGO funding and suggest the need for expanding public awareness and institutional support.