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CSR and Social Governance · Social Stock Exchange

Role of Social Auditors, Intermediaries and Regulators in the Social Stock Exchange

Updated 11 October 2026

The Social Stock Exchange works through several players. SEBI makes the rules and supervises. The Social Stock Exchange Advisory Committee advises SEBI. Stock exchanges run the SSE segment. Social auditors check impact reports. The Company Secretary ensures compliance and disclosures. Answer by naming each player, its function and the link between them.

Understand Role of Social Auditors, Intermediaries and Regulators

The Social Stock Exchange (SSE) is a separate segment of an existing stock exchange. It lets social enterprises raise funds and report their social impact. It cannot work on its own. It needs a rule-maker, a body to advise, a platform, someone to verify impact and someone to keep the enterprise compliant.

The Securities and Exchange Board of India (SEBI) is the regulator. It frames the SSE framework through regulations and circulars, and supervises recognised exchanges and the entities that take part. The idea of an SSE in India was taken forward after the Union Budget 2019-20 announcement. Following that announcement, SEBI set up a Working Group on Social Stock Exchange in 2019, chaired by Shri Ishaat Hussain. The Working Group submitted its report in 2020. SEBI then set up a Technical Group, chaired by Shri G. P. Garg, to take that work forward. The Technical Group also reported later in 2020, and SEBI's framework drew on both reports. Use these names only in the broad way ICSI material does; do not add details you cannot recall.

The Social Stock Exchange Advisory Committee is set up by SEBI to advise it on the development of the SSE. Treat it as an advisory body. It guides policy and does not make binding law. SEBI decides.

The stock exchanges (such as NSE and BSE) host the SSE segment. They register or recognise non-profit organisations and for-profit social enterprises, list or record fundraising instruments, and enforce disclosure by those who use the platform.

A social auditor is a professional or firm that examines and verifies the social impact reported by an enterprise. Under SEBI's framework, the social auditor must hold the qualifications and certification the framework prescribes, including the ICAI social audit certification course. The enterprise appoints the social auditor from this eligible pool. Impact is assessed in line with the applicable social audit standards. The Company Secretary is the compliance link. The CS helps the enterprise meet eligibility conditions, prepares and files disclosures, supports the board and governing body, and ensures the annual impact report is filed on time.

Key rules to remember

Role map
SEBI = regulates | Advisory Committee = advises SEBI | Exchange = hosts and monitors | Social auditor = verifies impact | Company Secretary = ensures compliance
Use this one-line map as the skeleton of any answer.
Advisory Committee status
Advisory Committee → recommends; SEBI → decides
Never call the committee a regulator or say its advice binds SEBI.
Reporting chain
Enterprise → impact report → social audit → disclosure on exchange → SEBI oversight
Shows how verification fits between reporting and regulation.

How to solve Role of Social Auditors, Intermediaries and Regulators questions

Questions on this topic ask you to explain the role of one or more players, or to apply the roles to a short case. Use this method.

  1. 1Read the question and mark which players are asked about: SEBI, committee, exchange, social auditor, CS.
  2. 2State the framework in one sentence: the SSE is a segment of a recognised stock exchange regulated by SEBI.
  3. 3Take each player in turn. Give its role in one or two lines, using verbs such as frames, advises, hosts, verifies, files.
  4. 4Link the players. Show how information flows from enterprise to auditor to exchange to SEBI.
  5. 5If a case is given, pick out the facts, such as a missing audit or a late disclosure, and match them to the responsible player.
  6. 6Add the Company Secretary's practical role: eligibility checks, disclosures, board and governing body support, filings.
  7. 7Conclude with one line on why the roles together protect donors and investors, and add a challenge or way forward if asked.

Quickest way: Five-player ladder

When to use it: Use when you have about ten minutes for a 5 to 8 mark question.

  1. Write the five players in a column: SEBI, Advisory Committee, Exchange, Social Auditor, CS.
  2. Next to each, write one verb and one object, such as SEBI frames rules.
  3. Draw arrows to show the reporting chain.
  4. Add two lines on challenges, such as limited awareness, cost of audit and impact measurement.
  5. Add one line on way forward, such as capacity building and standard metrics.

Common mistakes in Role of Social Auditors, Intermediaries and Regulators

  • Calling the Advisory Committee the regulator of the SSE.

    The word committee sounds like a decision-making body, and students mix it with SEBI.

    Fix: Write that it advises SEBI and SEBI takes the final decision.

  • Saying the SSE is a separate stock exchange.

    The name suggests a new exchange.

    Fix: Say it is a separate segment within an existing recognised stock exchange.

  • Leaving out the Company Secretary's role in answers on SSE.

    Students focus on SEBI and the exchange and forget the practical compliance work.

    Fix: Always add a paragraph on eligibility checks, disclosures, filings and board support.

  • Confusing a social auditor with a statutory financial auditor.

    Both use the word audit.

    Fix: Say a social auditor verifies reported social impact, not financial statements.

  • Quoting section numbers, dates or figures from memory.

    Students want an answer to look precise.

    Fix: Use only the details you are sure of. Explain the role in plain words.

Worked examples

Example 1

Explain the role of SEBI and the Social Stock Exchange Advisory Committee in the working of the Social Stock Exchange.

Show the solution
  1. Define the SSE as a segment of a recognised stock exchange for social enterprises to raise funds and report impact.
  2. SEBI is the regulator. It frames the framework, prescribes eligibility and disclosure, and supervises exchanges and participants.
  3. The report of the Working Group on Social Stock Exchange and the work of the later Technical Group shaped the framework that SEBI adopted.
  4. The Advisory Committee is formed by SEBI to advise on development of the SSE and related issues.
  5. Distinguish the two: the Committee recommends, SEBI decides and enforces.
  6. Conclude that the split keeps policy advice with experts and legal authority with the regulator.

Answer: SEBI makes and enforces the rules for the SSE. The Advisory Committee only advises SEBI on its development, and SEBI takes the final decision.

Example 2

A non-profit organisation registered on the SSE segment files its annual impact report without any social audit and is late in disclosure. As the Company Secretary advising its governing body, state who is responsible for what and what you would advise.

Show the solution
  1. Identify the facts: no social audit of the impact report and delayed disclosure.
  2. The social auditor's role is to verify reported impact, so the report is incomplete without it.
  3. The exchange monitors disclosures and may act on the delay under its rules and SEBI's framework.
  4. SEBI is the final regulator and can direct action if the breach continues.
  5. The primary responsibility lies with the organisation and its governing body. The CS advises and coordinates the filings.
  6. Advise: the organisation should appoint a qualified social auditor, complete the audit, file the report with a note on the delay, and set a compliance calendar to avoid repeats. The CS coordinates the audit and the filing.
  7. Advise the board to review internal controls so that disclosures are checked before filing.

Answer: The organisation and its governing body are responsible for the breach. They should appoint a qualified social auditor. The CS should advise on this, coordinate the audit, help file the corrected report, inform the exchange and set a compliance calendar. The exchange monitors and SEBI can take further action.

Exam tips

  • Begin every answer with the one-line role map. It earns marks quickly.
  • Keep the regulator and advisory roles clearly apart.
  • In case questions, link each fact to a player and then give practical advice as the CS.
  • If asked about challenges, mention awareness, audit cost, impact measurement and capacity of small NGOs, then a way forward.
  • Avoid unsure section numbers and figures. Clear roles score better than doubtful details.

Practice questions from Social Stock Exchange

Role of Social Auditors, Intermediaries and Regulators: frequently asked questions

What is the role of SEBI in the Social Stock Exchange?

SEBI is the regulator. It frames the SSE framework, sets eligibility and disclosure norms, and supervises the exchanges and participants. It also constitutes the Advisory Committee.

What does the Social Stock Exchange Advisory Committee do?

It advises SEBI on the development of the SSE and related matters. It is not a regulator and its advice does not bind SEBI.

What is the role of a Company Secretary in the Social Stock Exchange?

The CS helps the enterprise meet eligibility conditions, prepares and files disclosures and impact reports, and supports the board or governing body. The CS also tracks compliance deadlines.

What is the Technical Group report on the Social Stock Exchange?

The Technical Group was a later group set up to refine and operationalise the recommendations of the earlier Working Group on Social Stock Exchange. Its report, along with the Working Group's report, fed into SEBI's framework. For exams, know the purpose and influence of both rather than fine details.