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CS Professional · CSR and Social Governance · Social Stock Exchange

Asha Foundation, a registered public charitable trust, has been identified as a Not-for-Profit Organisation (NPO) under the SEBI framework for the Social Stock Exchange and wants to raise funds through the Social Stock Exchange. Before it can be listed or raise funds there, which step is required under the SEBI framework?

The NPO must register on or get listed with the Social Stock Exchange segment of a recognised stock exchange after being identified as eligible. It need not become a company, take an RBI licence or seek Registrar approval, since SEBI regulates the Social Stock Exchange framework.

  1. AIt must register or get itself listed with a stock exchange's Social Stock Exchange segment, after being identified as eligibleCorrect
  2. BIt must first convert itself into a company limited by shares
  3. CIt must obtain a licence from the Reserve Bank of India
  4. DIt must obtain prior approval of the Registrar of Companies for each fund raise

Explanation

Under the SEBI framework, an NPO that is eligible must register on, or be listed with, the Social Stock Exchange segment of a recognised stock exchange before raising funds. No conversion into a company, RBI licence or ROC approval is needed. The conversion option is wrong because trusts and Section 8 companies can both participate.

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