Advertisement
Private equity has played a significant role in shaping Indi...
In today’s real estate landscape, fitness is often treated...
In this episode of Prop Personalities, we sit down with Hars...
Luxury real estate is one of the most talked-about segments ...
Welcome to Prop Personalities by Prop News Time - a podcast ...
The Securities and Exchange Board of India has reduced the minimum investment threshold for individual investors in social impact funds to INR 1,000 from INR 2 lakh, aiming to broaden retail participation in the Social Stock Exchange. The change aligns with subscription norms for zero coupon zero principal instruments under existing regulations. The regulator has also introduced provisions allowing alternative investment funds to seek ‘inoperative’ status upon fund expiry. Additional relaxations include extending registration validity for not-for-profit organisations on the SSE and lowering minimum subscription requirements. Separate amendments to REIT and InvIT regulations were also notified as part of the broader regulatory update.
The Securities and Exchange Board of India (Sebi) has reduced the minimum investment requirement for individual investors in social impact funds to INR 1,000 from the earlier INR 2 lakh, as part of regulatory changes notified earlier this week in New Delhi to increase retail participation in the Social Stock Exchange (SSE) and improve fundraising access for not-for-profit organisations. Advertisement
The revision aligns the minimum application size for subscribing to zero coupon zero principal instruments (ZCZP) under Sebi’s Issue of Capital and Disclosure Requirements Regulations, 2018, with the threshold applicable to social impact funds. Previously, under Alternative Investment Fund (AIF) rules, individual investors were required to commit at least INR 2 lakh to such funds investing in securities of non-profit organisations listed or registered on the SSE.
To operationalise the change, Sebi amended the AIF regulations, formally lowering the entry barrier for retail investors. The move is expected to expand the investor base for social impact instruments by making participation more accessible at smaller ticket sizes.
In addition, the regulator introduced a framework allowing AIFs that do not retain funds after the expiry of their tenure to apply for an “inoperative” status, subject to prescribed conditions. Sebi indicated that this provision is intended to create a structured and efficient exit mechanism for funds that have completed their lifecycle, ensuring clarity in regulatory treatment once operations cease.
The regulator stated that while entry into the securities market is governed by eligibility criteria, the exit process for entities discontinuing operations should be predictable and operationally efficient. The inoperative status mechanism is designed to address this requirement.
Separately, Sebi has introduced further relaxations for entities operating on the Social Stock Exchange. The validity period for registration of not-for-profit organisations has been extended to three years from two years, allowing such entities to remain listed without raising funds during this period.
The regulator has also reduced the minimum subscription requirement for issuing zero coupon zero principal instruments to 50 per cent from the earlier 75 per cent. This relaxation applies to projects where costs and outcomes can be implemented on a clearly identifiable per-unit basis, ensuring that partial subscription does not affect execution.
These measures are aimed at enhancing flexibility in fundraising and improving the operational environment for social sector entities accessing capital markets through the SSE framework.
In separate notifications issued alongside these changes, Sebi also amended regulatory norms governing real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), as part of its broader review of market regulations.
Source - PTI
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
