Social Stock Exchange Governing Council
Also written SGC · Social Stock Exchange Governing Council (SGC)
The council every Social Stock Exchange must set up to oversee its functioning, with balanced stakeholder representation and guidance on registration, fund raising and disclosures by social enterprises.
In plain language
A Social Stock Exchange Governing Council (SGC) is the body that watches over a Social Stock Exchange from the inside.
SEBI regulates the SSE. The exchange runs it day to day. But the social sector is unlike the equity market — its participants are donors, trusts, grassroots NPOs and impact investors, not brokers and institutions. SEBI therefore required each SSE to have a council drawn from that world, so that the exchange's rules and processes are shaped by people who understand it.
The workbook's words: SEBI "has also specified that every Social Stock Exchange shall constitute a Social Stock Exchange Governing Council (SGC) to have an oversight on its functioning."
How it works
Composition (Chapter 2, 2.2.6). The SGC must have a balanced representation drawn from categories of stakeholders such as:
- philanthropic and social sectors, including public and private sector donors
- non-profit organisations
- Information Repositories
- social impact investors, etc.
Mandate. The SGC provides oversight and guidance to facilitate the smooth functioning of the SSE, in three named areas:
| Area | What that covers |
|---|---|
| Registration | Which social enterprises get onto the SSE, and on what terms |
| Fund raising | How NPOs and FPSEs raise money through it |
| Disclosures | What social enterprises report, and how |
Rights, obligations and the RDD (Chapter 3, 3.2). The SGC lays down the Rights and Obligations of NPOs and FPEs that wish to list, and the nuances of the Risk Disclosure Document (RDD). The RDD contains important information on the risks of trading on stock exchanges. All social enterprises are required to read it and understand the relationship they are entering and the extent of their risk exposure.
The workbook sources the requirement to SEBI's October 2022 circular on the Governing Council for SSEs.
Where it sits among the bodies:
| Body | Role |
|---|---|
| SEBI | Regulator of SSEs |
| The SSE (NSE SSE, BSE SSE) | Runs the segment, registers and lists |
| SGC | Oversight and guidance for that SSE; rights, obligations and RDD nuances |
| SRO (such as ISAI) | Registers and oversees Social Impact Assessors |
| Information Repository | Aggregates and verifies NPO data |
A worked example
Illustrative scenario.
Aarohan Trust, Guwahati, registered on BSE SSE in 2025, now plans a ₹1.2 crore ZCZP issue for flood-relief shelters.
- Before listing, Aarohan's trustees read the Risk Disclosure Document. Its nuances are laid down by the SGC, and every social enterprise is required to read it. They also read the rights and obligations document, which sets out what Aarohan must do once listed — including impact reporting.
- A disclosure question arises. The trustees ask whether a delay in one district, caused by a second flood, is a matter they must report. The materiality policy and the seven-day event disclosure rule come from LODR. How the exchange applies disclosure norms to social enterprises is an area where the SGC provides oversight and guidance.
- Who sits on the council. The SGC reviewing BSE SSE's processes that year might include a CSR head from a public sector company (a public sector donor), the director of a national NPO network (non-profit organisations), a representative of an NPO database (Information Repositories) and a partner of an impact fund (social impact investors). That is the balanced representation Chapter 2 requires.
If the scenario question asks "who regulates the SSE", the answer is SEBI. If it asks "who has oversight of the SSE's functioning" or "who lays down rights and obligations and the RDD", the answer is the SGC.
Why NISM asks about it
Chapter 2 (2.2.6, "Regulator and SRO" and "Governing Council for SSE's") introduces the SGC, its composition and mandate. Chapter 3 (3.2, "Rights, Obligations and Disclosures Document") gives it responsibility for the rights and obligations of listing entities and the RDD's nuances. Expect a question that separates the SGC from SEBI, the SRO and the exchange itself, and one that asks which stakeholders it draws its members from.
Common exam traps
- Every SSE constitutes its own SGC. It is not a single SEBI committee for the whole country.
- The SGC oversees; SEBI regulates. "The SGC is the regulator of social stock exchanges" is wrong.
- The SGC is not the SRO. The SRO (ISAI under ICAI, and the ICMAI and ICSI bodies) registers social impact assessors.
- The SGC lays down the rights and obligations and the nuances of the RDD. Not the NPO, and not the Information Repository.
- Its three areas are registration, fund raising and disclosures. Setting social impact assessment standards is not one of them — that is ICAI's work.
- Information Repositories sit on the SGC. They are also a separate SSE stakeholder in their own right.
Check yourself
1.As per the SEBI ICDR Regulations, a Social Impact Assessor must be an individual who:
- a)Is registered directly with SEBI and holds a CA qualification
- b)Is registered with an SRO under ICAI or another SEBI-specified agency, has qualified the NISM certification and holds a valid certificate
- c)Is employed by an NPO listed on the SSE
- d)Is appointed by the stock exchange's Governing Council
Show the answer
Answer: (b) Is registered with an SRO under ICAI or another SEBI-specified agency, has qualified the NISM certification and holds a valid certificate
The definition has three parts: registered with a self-regulatory organisation under ICAI or such other agency as SEBI specifies, qualified the NISM certification program, and holds a valid certificate.
There is no direct SEBI registration or CA requirement (A). An assessor must be independent, not the NPO's employee (C). The SGC oversees the SSE; it does not appoint assessors (D).
Where this is taught
Free preparation for NISM Series XXIIIRelated terms
- Social Stock ExchangeA separate segment of a recognised stock exchange on which Not for Profit Organisations and For Profit Social Enterprises register and list securities to raise money for social impact, under SEBI rules.
- Information RepositoryAn SSE participant that enumerates, standardises and verifies information on NPOs, keeping a reliable electronic database so donors and investors can compare them; NGO DARPAN is India's public example.
- Not for Profit OrganisationA social enterprise that is a charitable trust, charitable society or Section 8 company (or other entity SEBI specifies); it can register on an SSE and raise money mainly through ZCZP instruments.
- Social Impact AssessorAn individual registered with an SRO (under ICAI or another SEBI-specified agency) who has passed the NISM certification and holds a valid certificate; performs independent verification of impact reports.