What is social stock exchange (SSE)? Discuss the need for setting up of SSEs and key challenges in their effective implementation.

SEBI has recently launched Social Stock Exchange SSE. These SSE are regulated funding platforms like stock exchanges (eg BSE). Social stock exchanges are for non-profit private enterprises and non-governmental organisations NGOs involved in social work to raise funds. Need of setting up SSE: 1. To facilitate fund raising for social purpose by NGOs, etc.

2. This will reduce burden on government for funding these institutions. 3. Increase customomy of NGOs etc as not dependent on government. 4. Data-driven and evidence based philanthropic activities, where investors can choose where to invest based on performance. 5. Increased choice by investor and NGOs board. 6. Help funded institutions to promote social activities not undertaken by government as issue of caste discrimination, homosexuality etc. Challenges: 1. High transaction cost may lead to disincentivised institutions and investors. 2. Difficult to identify actual social impact of NGOs, etc.

3. Possibility of misuse by some anti-social NGOs who are formed only for political purposes. 4. Issues in accreditation of NGOs. Way forward: 1. Social stock exchange must be accessible only after proper verification, background check. 2. National accreditation body for NGOs. With FCRA and CSR, NGOs and non-private profit bodies will live up to expectations of social welfare.