Annual Compliance for Social Enterprises Listed on the Social Stock Exchange
In recent years, India’s Social Stock Exchange (SSE) is a joint initiative by SEBI, NSE, and BSE – has opened new avenues for social enterprises and nonprofits to raise capital transparently. Alongside these advantages comes a responsibility: strict annual compliance to uphold credibility, governance, and impact reporting. This blog explains the key yearly compliance requirements for entities registered or listed on the SSE, based solely on official SEBI, NSE, and BSE sources, along with applicable regulations.
1. SEBI’s Regulatory Framework for SSE Compliance
1.1 Listing under LODR and ICDR Regulations
Social enterprises (both non-profit and for-profit) come under SEBI’s modified regulations:
- ICDR (Issue of Capital and Disclosure Requirements): Chapter X A outlines eligibility and fund-raising norms.
- LODR (Listing Obligations and Disclosure Requirements): Chapter IX A imposes disclosure and reporting duties.
These rules make SSE compliance mandatory – ensuring transparency and governance akin to commercial listings.
2. Annual Self-Disclosure Report (Form 1A and 1B)
By October 31 (for the FY ending March 31), entities must submit annual self-disclosures to the SSE, using revised formats specified in BSE and NSE circulars dated July 31, 2024.The forms include:
- Form 1A: Covers general and governance-related disclosures (non-financial).
- Form 1B: A comprehensive report including general, governance, and financial disclosures linked with audited statements. It also integrates an Annual Social Impact Report for non-SSE-funded programs.
These forms replaced older templates from March 2024 onward.
3. Annual Social Impact Report (Form 2.1)
For programs funded through SSE listings (e.g., Zero Coupon Zero Principal bonds), Form 2.1 must be submitted annually. It entails a detailed impact analysis of funded projects and follows the Logic Model/ Theory of Change framework.
4. Audited Annual Impact Report (AIR)
Entities registered or listed on SSE must file an audited Annual Impact Report within 90 days of the fiscal year-end (by June 30). This document must be audited by a qualified social auditor recognized by SEBI, such as chartered cost accountants certified by National Institute of Securities Markets.
5. Quarterly Utilisation Statement of Funds
For those actively raising funds through SSE, SEBI mandates quarterly reporting of fund utilisation. This declaration, submitted within 45 days of each quarter-end, details:
- Funds raised (category-wise)
- Funds disbursed (category-wise)
- Unutilised balance
6. Timeline Extensions and Flexibility
Initially, SEBI required submission of annual disclosures by within 60 days of fiscal year-end (i.e., by June 30). However:
- For FY 2023 24, SEBI issued a May 27 2024 circular extending the deadline to October 31, 2024.
- A subsequent October 9, 2024 circular permitted further extension, pushing the disclosure deadline to January 31, 2025.
It is vital that enterprises adhere to any deadline extensions announced by SEBI or exchanges.
7. What Exactly Must Be Disclosed?
According to SEBI Regulation 91C/91E and detailed by KPMG’s interpretation of LODR:
A. Form 1A (Self-Disclosure – Governance & General Aspects):
- Legal entity details and mission
- Operations overview: outreach numbers, locations
- Governance structure: board members, policies, internal controls
- Risk management, conflict of interest mechanisms, grievance redressal, compliance processes, stakeholder ethics
B. Form 1B (Self-Disclosure – Governance, Financial, and Impact):
- Includes audited financial statements for the last 3 years
- Break-down of programme-wise budgets and expenditures
- Overview of financial health, budget allocation and related-party transactions
C. Form 2.1 (Impact Report for Funded Projects):
- Quantitative and qualitative metrics for projects financed through SSE-listed instruments, aligning with the Logic Model framework.
D. Audited AIR:
- Impact metrics, beneficiaries re2ached, donor details, social outcomes
- Governance overviews: impact audit processes, data integrity mechanisms
8. Social Auditor Accreditation
SEBI mandates that Social Audit Reports be conducted by certified auditors:
- Chartered Accountants or Cost Accountants with SSE social auditor accreditation
- Successful completion of an SSE social auditor certification by the National Institute of Securities Markets
9. Consequences of Non-Compliance
Failure to submit disclosures or audits on time can lead to serious repercussions:
- Public reprimand or penal actions by BSE/NSE or SEBI
- Reduction in credibility with investors and stakeholders
- Possible suspension from the SSE segment until all disclosures are regularised
Maintaining timely compliance is vital for stakeholder trust and future fundraising capability.
10. Key Takeaways for SSE-listed Entities
To remain compliant, entities must:
| Task | Deadline |
| Form 1A/1B submission | By Oct 31 post-fiscal year end (e.g., Oct 31, 2024 for FY 23 24) |
| Audited AIR | Within 90 days of FY-end (e.g., by June 30) |
| Quarterly fund utilisation | Within 45 days of each quarter-end |
| Adhere to updated formats | Following July 2024 circulars; apply Logic Model framework |
| Engage certified Social Auditor | Maintain certification by SEBI-recognised bodies |
* Do check for further deadline shifts as previously extended in Jan 2025 for FY 23 24.
Conclusion
Listing on India’s Social Stock Exchange is more than access to the funds and it’s a pledge to transparency, accountability and above all, intention-led impact. Annual compliance isn’t just statutory; it shapes credibility and social trust. If your entity plans future listings or is already part of SSE, start early: prepare documents, partner with accredited social auditors, and rigorously adhere to timelines.
By meeting annual compliance requirements—annual self-disclosures, audited impact reports, and regular fund utilisation statements—you solidify stakeholder confidence and lay the foundation for long-term, meaningful contributions to social development.
| Read More: Social Stock Exchange IPO: Overview, Eligibility, Process, and Key Insights |
Frequently asked questions (FAQs)
1. Deadline for submitting the Annual Disclosure Report after listing on the Social Stock Exchange?
For most financial years, the deadline is October 31 following the end of the fiscal year (which ends March 31). However, SEBI may extend this deadline through official circulars. For instance, for FY 2023-24, the deadline was extended to January 31, 2025. Entities must check SEBI, BSE, or NSE circulars regularly for updates.
2. Who is eligible to conduct the Social Audit for the Annual Impact Report?
Only a SEBI-registered Social Auditor can conduct the audit. These auditors are typically qualified chartered accountants, cost accountants, or professionals who have passed the Social Auditor Certification course offered by the National Institute of Securities Markets (NISM). The audit ensures credibility and accountability in the reporting of social outcomes.
3. What are the consequences of non-compliance with annual reporting requirements?
Fail to comply with requirements may lead to penalties, suspension from the Social Stock Exchange platform or loss of trust and credibility with stakeholders. It can also hamper the future fundraising efforts and activate regulatory scrutiny. Hence, timely and accurate submission of annual disclosures and audit reports is essential for the purpose of listed entities...!
