The Government of India in the FY2019-20 budget proposed for the creation of a Social Stock Exchange (SSE). The SSE would enable organisations working towards the realisation of social welfare objectives for listing their securities under the regulatory ambit of the Securities and Exchange Board of India (SEBI). The SSE is going to be a separate segment on the existing stock exchanges. The SSE will enable Social Enterprises (SEs) to raise funds.

On 25 July 2022, SEBI introduced regulations pertaining to the SSE by amending the following regulations, namely:

  • The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations)
  • The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) 
  • The SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations).

As part of the amendments made to the above regulations, SEBI introduced certain important concepts and definitions such as – Social Stock Exchange (SSE), social auditor, social audit firm, For Profit Social Enterprise (FPSE), Social Enterprises (SEs), etc.

Under the SSE framework, the Institute of Chartered Accountants of India (ICAI) has been entrusted with the responsibility of being the self-regulatory organisation for regulating the profession of social auditors. In this regard, on 5 August 2022, ICAI released an Exposure Draft (ED) on Compendium of Social Audit Standards (SAS).

In this issue of the First Note, we aim to discuss the framework of SAS issued by ICAI in light of the growing emphasis on sustainability reporting.

To access the text of the ICAI ED, please click here

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