According to Regulation 292G of the SEBI (ICDR) Regulations, a Social Enterprise may raise funds through several means; including (i) issuance of Zero Coupon Zero Principal Instruments (ii) donations through Mutual Fund;

CS Professional · CSR and Social Governance · PYQS · June 2024
According to Regulation 292G of the SEBI (ICDR) Regulations, a Social Enterprise may raise funds through several means; including (i) issuance of Zero Coupon Zero Principal Instruments (ii) donations through Mutual Fund; (iii) issuance of equity shares on the main board (iv) issuance of debt securities; but certain social enterprises are not eligible for raising funds. Explain.

Answer & Explanation:

According to Regulation 292G of the SEBI (ICDR) Regulations, a Social Enterprise may raise funds through various means, including: Issuance of Zero Coupon Zero Principal Instruments (ZCZP). Donations through Mutual Funds. Issuance of equity shares on the main board (for for-profit social enterprises). Issuance of debt securities (for for-profit social enterprises). However, certain social enterprises are not eligible to register or raise funds through a Social Stock Exchange or Stock Exchange, as per Regulation 292H of the SEBI (ICDR) Regulations, if: the Social Enterprise, any of its promoters, promoter group or directors or selling shareholders or trustees are debarred from accessing the securities market by the Board; any of the promoters or directors or trustees of the Social Enterprise is a promoter or director of any other company or Social Enterprise which has been debarred from accessing the securities market by the Board; the Social Enterprise or any of its promoters or directors or trustees is a wilful defaulter or a fraudulent borrower; any of its promoters or directors or trustees is a fugitive economic offender; the Social Enterprise or any of its promoters or directors or trustees has been debarred from carrying out its activities or raising funds by the Ministry of Home Affairs or any other ministry of the Central Government or State Government or Charitable Commissioner or any other statutory body. Explanation: The restrictions under clauses (a) and (b) above shall not apply to the persons or entities mentioned therein, who were debarred in the past by the Board and the period of debarment is already over as on the date of filing of application for registration with the Social Stock Exchange or filing of draft fund-raising document or draft offer document, as may be applicable, with the Social Stock Exchange or the Stock Exchange or the Board.

Topics: Social Stock Exchange (SSE)

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