Sebi Extends NPO Registration Validity For Social Stock Exchanges To 3 Years

In a bid to facilitate fundraising for non-profit organisations, the Securities and Exchange Board of India (Sebi) has relaxed rules for Social Stock Exchange (SSE). In a circular dated April 16, 2026, Sebi has extended the registration period for not-for-profit organisations (NPOs) to three years and lowered the minimum subscription requirement for zero coupon zero principal (ZCZP) instruments.

“An NPO may register on an SSE and not raise funds through it for a period of two years from the date of registration. Such a period of two years may be further extended by one additional year subject to approval by the SSE,” Sebi said in the circular.

The relaxation in norms comes in the wake of practical challenges faced by NPOs with respect to statutory and regulatory approvals. This change in norms will allow NPOs to get registered on the SSE without having to raise capital for an additional year. Sebi’s move also aims to promote participation in SSE along with easing funding requirements for NPOs.

The market regulator has also reduced the minimum subscription requirement of zero-coupon bonds to 50 per cent from the previous 75 per cent. The relief will only apply to projects where costs and outcomes and executed on the basis of per unit which are clearly identifiable, and ensuring that in case of partial funding the execution is not undermined.

“The minimum subscription required to be achieved shall be 75 per cent... provided that the minimum subscription... shall be 50 per cent in case where the funds raised can be deployed... in a manner that the implementation of the project remains viable and meaningful,” Sebi said in the circular.

Sebi added that the SSE must conduct due diligence and ensure that the entities are capable of deploying funds raised in a meaningful manner, before granting them in-principal approvals. If the issuance is undersubscribed, then the funds should be refunded to investors. Sebi further said that NPOs will be required to disclose how they plan to raise the remaining capital if the issue is undersubscribed. NPOs also need to outline the potential impact of under-subscription on project outcomes if the fund gap is not bridged.

The change in norms builds on Sebi’s broader push to strengthen the SSE framework and channel capital for social enterprises. In March 2026, Sebi had lowered the minimum investment size for social impact funds to Rs 1,000 from Rs 2 lakh with an aim to attract retail participation. This is aligned with the minimum application requirement for subscribing to zero-coupon instruments.