Centre for Youth Ltd. (CYL) is a section 8 company and operating since last 20 years. Its prime area of activities is to promote education and employability amongst unserved population. Currently the major donations come

CS Executive · Capital Market and Securities Laws · PYQS · June 2024
Centre for Youth Ltd. (CYL) is a section 8 company and operating since last 20 years. Its prime area of activities is to promote education and employability amongst unserved population. Currently the major donations come through advertisement in social media. As the company started providing education towards financial literacy, it needs more funds to cater the growing demand. The management is of the view that as CYL is a not-for-profit entity, it can't raise funds through open market for fulfilling its objects. You being a SEBI law consultant, advise the management on the below aspects for raising of funds through Social Stock Exchange (SSE) (with reasons): What type of instrument is allowable for CYL for fund raising?

Answer & Explanation:

A Not for Profit Organization may raise funds on a Social Stock Exchange through: issuance of Zero Coupon Zero Principal Instruments to institutional investors and/or non-institutional investors; donations through Mutual Fund schemes as specified by SEBI; any other means as specified by SEBI from time to time. [Regulation 292G of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018] Therefore, CYL is allowed for raising fund through the above-mentioned instruments.

Topics: Social Stock Exchange

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