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Jan Utthan Trust, a registered public charitable trust, has had its registration as a Not for Profit Organisation (NPO) on the Social Stock Exchange accepted. It now plans to raise funds through the Zero Coupon Zero Principal instrument. Which reporting obligation applies to it once it is registered and raises funds on the Social Stock Exchange?

An NPO that is registered and raising funds on the Social Stock Exchange must file an annual impact report in the SEBI-specified format, along with its other periodic disclosures. Disclosure does not depend on being a listed company or on any raise threshold, and it is not limited to for-profit entities.

  1. AIt must file an annual impact report with the Social Stock Exchange, in the format specified by SEBICorrect
  2. BIt need not disclose anything because it is not a listed company
  3. CIt must file only a financial statement, because impact reporting applies to for-profit social enterprises alone
  4. DIt must report to SEBI only when the amount raised exceeds Rs 10 crore

Explanation

Under SEBI's framework, NPOs registered or listed on the Social Stock Exchange must make periodic disclosures, including an annual impact report, in addition to financial reporting. The claim that impact reporting is for for-profit social enterprises alone is wrong, since NPOs are the main entities covered. No Rs 10 crore threshold triggers the obligation.

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