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Samhita recently conducted a study of SSE’s in 7 countries to evaluate its importance in India
October 21: The Securities and Exchange Board of India approved the creation of the ‘Social Stock Exchange’, which is seen as a game-changer in the social impact segment. These are regulated platforms that bring together social organisations, donors, and investors to facilitate funding and aid in the growth of organisations with a social purpose.
Samhita’s study on Social Stock Exchanges from seven countries
Samhita’s report reviews seven SSEs in Brazil, Portugal, South Africa, Jamaica, the UK, Singapore and Canada. The report analyses the recommendations proposed by India’s SSE Working Group and provides additional suggestions.
India as the world’s largest democracy, gears up to construct an SSE customized to the needs of the Indian organizational ecosystem, a comprehensive analysis of the experiences, structures, and learnings from SSEs across the world can aid civil society, policymakers and the private sector in their endeavor to create an enabling environment for social organizations.
Highlights of the study –
SSEs can theoretically unlock new capital, promote equity, and introduce new instruments for donors to fund operations, streamline regulations and create an ecosystem of enabling frameworks for civil society. The report also lays down the risks such as duplicating the operations of a conventional stock exchange, segmenting or further exacerbating inequalities within sectors, and failing to create a strong culture of giving. Stakeholders must create a representative that incorporates the concerns and wisdom of civil society and social organisations. The report concludes that an SSE can be a means for the markets to serve the society, not for society to serve the markets.
“Our report did a comprehensive analysis and reviewed SSEs across seven countries. It suggests that engaging and educating donors/ investors about effective and strategic forms of giving, and providing commensurate tax incentives to incentivize them, are critical factors that can determine the success and sustainability of the SSE in India, in addition to the provisions already created by SEBI.”, says Tanushree Parekh, Advisor, Samhita.
Given below are the key findings and guidelines enlisted by experts of the Samhita team for the Social Stock Exchange in India.
SEBI has specified that SSE will allow both non-profit and for-profit social organizations to list. It is likely that SEBI may approve the criteria put forth by the second expert committee (Technical Group).
However, the SSE should ensure that the accreditation and certification process for social auditors takes into consideration the context, nuances and realities of social organizations and programs and avoids blueprinting from financial auditing processes. A multi-stakeholder process involving practitioners, academia and social research organizations can impart credibility and relevance to the social audit certification.
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