A Social Stock Exchange (SSE) is a specialized platform designed to facilitate the listing, trading, and fundraising of socially responsible organizations, such as social enterprises, nonprofit organizations, and impact-driven companies. The main objective of an SSE is to connect these organizations with impact investors, who are interested in generating both financial returns and positive social or environmental outcomes through their investments.

Key features and benefits of a Social Stock Exchange include:

1. Access to capital: An SSE provides a platform for socially responsible organizations to raise funds through various financial instruments, such as equity, debt, or blended finance. This can help these organizations access the necessary resources to scale their operations, create more significant social impact, and become more sustainable.
2. Transparency and accountability: Organizations listed on an SSE are required to adhere to specific disclosure norms and reporting standards, which promote transparency, accountability, and good governance. This enables investors to make informed decisions and helps build trust among stakeholders.
3. Impact measurement and reporting: An SSE encourages organizations to adopt standardized impact measurement frameworks and report their social and environmental performance. This helps investors assess the effectiveness of their investments in generating positive social and environmental outcomes and facilitates comparisons among different organizations.
4. Recognition and visibility: Being listed on an SSE can help socially responsible organizations gain recognition and visibility, both within the impact investment community and among the broader public. This can enhance their reputation, attract more investors, and create new partnership opportunities.
5. Investor diversification: An SSE allows socially responsible organizations to access a diversified pool of investors, including institutional investors, family offices, high-net-worth individuals, and retail investors who are interested in impact investments. This can reduce organizations’ reliance on traditional sources of funding, such as grants and donations.
6. Market development: The SSE promotes the growth and development of the impact investment market by providing a dedicated platform for socially responsible organizations and investors. This helps create awareness about impact investing, encourages more investors to participate in the market, and fosters a supportive ecosystem for organizations that create social and environmental value.
7. Benchmarking and performance tracking: An SSE may establish indices or performance benchmarks to track the financial and social performance of the listed organizations. These benchmarks can help investors assess the performance of their investments relative to the broader market and make more informed investment decisions.
8. Regulatory oversight: An SSE operates under the supervision of a regulatory authority, which ensures that the listed organizations comply with the applicable rules, regulations, and best practices. This provides an additional layer of protection for investors and helps maintain the integrity of the market.

The idea of creating a Social Stock Exchange was proposed by the Indian Finance Minister, Nirmala Sitharaman, during the Union Budget presentation in July 2019. The purpose of the SSE is to provide a platform for social enterprises, nonprofit organizations, and other mission-driven organizations to raise capital and connect with impact investors who are interested in investing in socially and environmentally responsible ventures.

The Securities and Exchange Board of India (SEBI) constituted a working committee to develop guidelines and regulations for the establishment of the SSE. This committee submitted its recommendations in June 2020, outlining various aspects such as eligibility criteria, listing requirements, disclosure norms, and governance standards for organizations seeking to participate in the SSE.

The SSE is expected to promote the growth of socially responsible businesses and organizations, facilitate impact investments, and encourage transparency and accountability in the social sector. Once operational, the SSE will provide an innovative and inclusive platform for organizations focused on creating social and environmental value, helping them access the necessary financial resources to scale their operations and achieve their objectives.