Capital markets regulator SEBI introduced stricter regulations for the Social Stock Exchange (SSE) on September 19, 2025, aiming to enhance governance and transparency for not-for-profit organizations (NPOs) and social enterprises, according to a circular (SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/129).

The updated framework mandates that NPOs registering with the SSE must be Indian trusts, societies, or Section 8 companies with a valid registration certificate held for at least 12 months. New annual disclosure requirements cover governance, finances, donor lists, and social impact, due by October 31 or the income tax return deadline, whichever is later.

Social enterprises raising funds via the SSE must file an Annual Impact Report (AIR), verified by SEBI-registered Social Impact Assessors, covering at least 67% of program expenditure. SSEs can also enforce additional disclosure parameters to ensure compliance.

The reforms aim to protect investors, ensure accountability, and align SSE operations with SEBI’s broader capital market regulations, such as the ICDR and LODR frameworks. By mandating independent impact assessments, SEBI seeks to drive measurable social outcomes and foster confidence in India’s growing social finance sector.

“These changes strengthen the SSE ecosystem, ensuring funds serve genuine social purposes while maintaining regulatory oversight,” a SEBI spokesperson said.

The rules reflect SEBI’s push to mainstream social investment while mitigating risks of fraud and enhancing credibility in the evolving social sector.