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Tag: SEBI

  • SEBI proposes Rs 1,000 SIF investment to boost Social Stock Exchange

    SEBI proposes Rs 1,000 SIF investment to boost Social Stock Exchange

    By Eldee

    Markets regulator SEBI has proposed slashing the minimum investment by individual investors in Social Impact Funds (SIFs) to an accessible Rs 1,000 from Rs 2 lakh, in a bold move to boost retail participation and deepen the Social Stock Exchange (SSE) ecosystem.

    Issued on February 9, 2026, the consultation paper outlines reforms to make social finance more inclusive, following recommendations from the Social Stock Exchange Advisory Committee (SSEAC). The changes aim to encourage greater involvement from not-for-profit organisations (NPOs) and small investors in funding social causes.

    Key proposals include:

    • Reducing the minimum investment threshold in SIFs (which invest in SSE-registered NPO securities) from Rs 2 lakh to Rs 1,000 under SEBI (AIF) Regulations, aligning it with the existing Rs 1,000 minimum for Zero Coupon Zero Principal (ZCZP) applications.
    • Extending NPO registration validity on the SSE (without active fundraising) from two years to three years.
    • Lowering the minimum subscription requirement for ZCZP issuances to enhance fundraising ease.

    These steps build on the SSE framework operationalised since 2023 under SEBI’s (ICDR) and (LODR) Regulations, plus related circulars like the January 2026 Master Circular.

    SEBI has invited public comments on the proposals and draft circular. Submissions can be made via the online portal or emailed to consultationcfd@sebi.gov.in.

    The consultation remains open (typical 21-day period suggests comments likely due early March 2026; check the official SEBI page for the precise deadline).

  • SEBI’s ESG Reforms Usher in Transparency, Face Teething Issues

    SEBI’s ESG Reforms Usher in Transparency, Face Teething Issues

    The Securities and Exchange Board of India’s (SEBI) April 29, 2025, circular on ESG Rating Providers (ERPs) has reshaped India’s capital markets, with its key provisions now in full swing, as per the July 11 Master Circular (SEBI, April 29, 2025; SEBI, July 11, 2025).

    By mandating public disclosure of ESG scores on stock exchanges and company websites, requiring ERP registration, and enforcing strict rating withdrawal rules—such as bondholder consent or minimum three-year coverage—SEBI is driving unprecedented transparency (SEBI, April 29, 2025).

    This empowers investors, particularly retail ones, to weigh sustainability alongside profits, while pushing companies to prioritise environmental, social, and governance (ESG) standards.

    The rules are clear: subscriber-pays ratings can only be withdrawn if there are no active subscribers or if firms skip their Business Responsibility and Sustainability Report (BRSR).

    Index-linked ratings, like those tied to the Nifty 50, remain in place as long as the index has subscribers. For issuer-pays bond ratings, withdrawal requires 75% bondholder approval or coverage for half the bond’s tenure. Mergers or repaid bonds allow withdrawals, but only with proper documentation (SEBI, April 29, 2025).

    Yet, challenges loom large. SEBI has flagged inconsistent data quality and a shortage of assurance providers for ESG/BRSR reports, raising concerns about the reliability of ratings (SEBI, September 2025).

    Some ERPs are still refining their methodology disclosures, though efforts to standardise are ongoing (SEBI, July 2025). Smaller companies, in particular, struggle with BRSR compliance, which could undermine the system’s effectiveness.

    Looking ahead, SEBI is eyeing alignment with global frameworks like ISSB and TCFD by 2026, aiming to make ESG a strategic cornerstone rather than a compliance burden (SEBI, July 2025).

    These reforms position India’s markets as a hub for sustainability-focused investors, but addressing capacity gaps and data inconsistencies is critical to sustaining this momentum.

    For now, SEBI’s bold push is setting a new benchmark for transparency, even as it navigates early hurdles.