March 2025

SEBI Consultation Paper on Review of Framework for Social Stock Exchange

Background

In 2022, India joined a select group of nations that have explored or established a Social Stock Exchange. India’s securities markets regulator, the Securities Exchange Board of India (“SEBI”) prescribed the regulatory framework for the Social Stock Exchange through amendments dated July 25, 2022  to  SEBI  (Issue  of  Capital  and  Disclosure  Requirements)  Regulations, 2018 (“ICDR Regulations”), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) and SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”).

As per the ICDR Regulations, the following entities are eligible to access the SSE:

• a charitable trust registered under the public trust statute of the relevant state;
• a charitable society registered under the Societies Registration Act, 1860;
• a company incorporated under section 8 of the Companies Act, 2013; or
• any other entity as may be specified by SEBI.

An eligible NPO is also required satisfy additional criteria, to qualify to register and thereafter list on the SSE:

• At least 67% of its activities should be “eligible activities” (which also includes training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports44) as supported by its revenue and expenditure for the past 3 financial years or at least 67% of their targeted beneficiaries have benefitted from the eligible activities/programs;
• They should be validly registered under the Income Tax Act, 1961 (under Section 12A/12AA/12AB and 80G);
• Their annual spending in the last financial year must be at least INR 50 lakhs; and
• Annual funding in the last financial year must be at least INR 50 lakhs.

NPOs looking to list on the SSE are required to first register themselves with the relevant stock exchange, namely, the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE). Upon successful registration, which is valid for a period of 1 year, the NPO can thereafter prepare its draft fund raising document (DFRD) which sets out in detail, its establishment, its promoters/governance, its donors/funders, its work and the specific project for which it is seeking to raise funding. In addition, the DFRD will contain other information similar to a prospectus issued by a for profit entity seeking to list on a stock exchange, such as risk factors, issue related information, management information, financials, etc.

The DFRD is required to be filed with the relevant stock exchange for their review, and updated with their comments, if any, after which the final fund raising document is filed with the relevant stock exchange. Upon receipt of the in-principle approval from the relevant stock exchange, the issue opens for subscription for the specified duration. Upon issue closure, the Zero Principal Zero Coupon security is credited to the account of the successful applicants.

In December 2023, India witnessed its first-ever listing on the SSE, with SGBS Unnati Foundation (“SUF”) becoming the first entity to take this route to avail financing. SUF, a not-for-profit (registered as a Section 8 Company under the Companies Act, 2013) engaged in providing vocational training for the underprivileged and unemployed youth in the age group of 18 years – 25 years, raised ₹1.8 crore from four investors – which included brokerage firm Zerodha and National Bank for Agriculture and Rural Development (NABARD).

As on December 31, 2024, a total of 111 Not-for-Profit Organizations (NPOs) are registered on SSE segment of both the Stock Exchanges i.e. NSE-SSE and BSE-SSE. Further, 10 NPOs have raised funds amounting to INR 22 crores through SSE by issuing Zero Coupon Zero Principal instrument.

On January 20, 2025, the SEBI issued a 𝗰𝗼𝗻𝘀𝘂𝗹𝘁𝗮𝘁𝗶𝗼𝗻 𝗽𝗮𝗽𝗲𝗿 which outlines their proposed amendments, based on the 𝗿𝗲𝗰𝗼𝗺𝗺𝗲𝗻𝗱𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗦𝗼𝗰𝗶𝗮𝗹 𝗦𝘁𝗼𝗰𝗸 𝗘𝘅𝗰𝗵𝗮𝗻𝗴𝗲 𝗔𝗱𝘃𝗶𝘀𝗼𝗿𝘆 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲. Some of the key amendments proposed are as follows:

• Expansion of not-for-profit entities that are eligible to be registered and listed on the SSE, to include trusts, societies and “Section 25 companies” (the predecessor to the Section 8 company);
• Increase in the validity of registration from 1 year to 2 years-This has been mooted considering that only 10 of the 111 registered NPOs have listed as of December 2024. The objective here seems to be to allow more time for registered NPOs to ultimately list on the SSE, without having the need to renew their registration.
• Broadening the list of eligible activities that NPOs should be engaged in, and a corresponding expansion of “targeted beneficiaries” to include “intangibles”, such as the environment, improvement in natural ecosystems, protection of culture and heritage, etc.
• Easing the 67% eligibility requirement to only those NPOs whose business income exceeds 20% in the most recent financial year; and
• Changes to the reporting requirements and timelines, ostensibly to ease the regulatory reporting burden. The proposal is to bifurcate the annual self- disclosures in two aspects:
• Financial Aspects– covering disclosures of general, governance and finance aspects that have a reference to audited financial statements; and
• Non-Financial Aspects-covering general and governance disclosure aspects that are not dependent on audited financial statements.

The SEBI has proposed to revise the timelines for disclosures pertaining to financial aspects to October 31 after the end of the financial year or within such period as may be specified by the Board. The timelines for disclosures pertaining to non- financial aspects may remain same i.e. within 60 days from the end of the financial year.

The SSE is an ever evolving space, and the continued focus on adapting the regulations to encourage listing is welcome. However, ​a key missing link continues to be the amendment to the CSR regulations to recognize investments in SSE listed products as eligible CSR expenditure, which could unlock greater interest and investments through this platform.

December 2024

Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure-2024

On September 17, 2024, the Ministry of Power, Government of India issued a fresh set of guidelines for “Installation and Operation of Electric Vehicle Charging Infrastructure-2024” (“MoP Guidelines”), which supercede all previous versions issued by it, and which shall be effective from the date of its issuance. A few salient provisions of the MoP Guidelines are outlined below:

• Who do these Guidelines apply to? These guidelines shall be applicable to

(i)        Manufacturers, Owners and Operators of EV Charging Infrastructure located

(a)       In private parking spaces;

(b)       In semi-restricted places like office buildings, educational institutions, hospitals, Group Housing Societies, e-bus depots; and

(c)       In public places like commercial complexes, railway stations, petrol pumps, airports, metro stations, shopping arcades, municipal parking; and

(d)       On highways & expressways.

(ii) Power utilities and Central and State agencies.

• Why have these Guidelines been issued?
• To drive EV adoption by making charging stations safe, reliable and accessible.
• To develop a robust charging network across India, initially prioritizing the essential locations.
• To increase the viability of charging stations by facilitating public land at promotional rates, expeditious approval of electricity connections and standardising pricing of power supply.
• To encourage charging of EVs during solar hours.
• To prepare the electricity grid to handle the increased demand from EV charging.
• What general requirements specified in these MoP Guidelines would Charge Point Operators and Distribution Licensees need to comply with?

Charge Point Operators may apply for an electricity connection for their EV charging stations. The Distribution Licensee must provide the required connection according to the following timelines specified under Electricity (Rights of Consumers) Rules, 2020 as amended from time to time:

In case of delay in supplying electricity within the period specified by the appropriate Commission, distribution licensee shall be liable for a penalty as may be determined by the Commission as per Electricity (Rights of Consumers) Rules, 2020 as amended from time to time.

To expedite the process, Distribution Licensees must establish a customer friendly online single window clearance system, following the Standard Operating Procedure and application form outlined in ANNEXURE – III of the Guidelines.

• Safety, Functionality and User Experience
• All Electric Vehicle Supply Equipment shall comply with BIS standards indicated at ANNEXURE — I of the MoP Guidelines.
• Safety & Connectivity of Electric Vehicle Supply Equipment requirements shall be as specified in CEA “Measures relating to Safety and Electric Supply” Regulations 2023 as amended from time to time, and the CEA “Technical Standards for Connectivity of the Distributed Generation Resources” Regulation (2013) as amended from time to time.
• Functionality and User Experience requirements specified in ANNEXURE — II of these guidelines.

• Provision of public land at promotional rates for Public Charging Stations:

The Guidelines have made a specific provision to provide for public land at promotional rates for Public Charging Stations (“PCS”).

• Government/Public entities shall offer land for installation of PCS at a subsidized rate to Government/Public entity. This will be a revenue-sharing model where the land-owning agency receives 1 per kWh of electricity used for charging at the station, to be paid quarterly. The revenue sharing agreement may be initially entered by parties for a period of 10 years. A model revenue sharing agreement is placed at ANNEXURE – IV of the MoP Guidelines.
• The Revenue Sharing Model may also be adopted by the public Landowning agency for providing the land to a private entity for installation of Public Charging Stations on bidding basis with floor price of 1 per kWh.
• Charging Station Network

To ensure widespread availability, the following guidelines for Public Charging Station placement may be adopted.

• Density

(a)       Urban Areas: By FY 2030, the MoP Guidelines envisage that there will be at least one charging station within a 1 km x 1 km grid in urban areas as notified by respective state governments.

(b)       Highways: The Mop Guidelines require that Charging Stations will be located every 20 km on both sides of highways, expressways, and major roads. c. Long-Range & Heavy-Duty EVs: For long-range EVs and heavy-duty vehicles like buses and trucks, the MoP Guidelines envisage that a fast-charging station will be located every 100 km on each side of the designated expressways, highways and major roads. Ideally, these stations will be situated within or near existing public charging stations. Cities/Urban Development Authorities/States may locate these facilities in urban regions within areas such as transport hubs or bus depots.

• Flexibility: Additional charging stations, both standard and fast charging, can be installed beyond the minimum requirements.
• Infrastructure Planning: State and Union Territory governments will utilize these density/distance guidelines to: (a) Secure land for public charging stations; (b) Prioritize installation of supporting infrastructure like transformers and feeders for electricity distribution; and (c) Implement these measures even in cases without central or state subsidies.
• Partnerships: The government may prioritize existing fuel retail outlets operated by Oil Marketing Companies (OMCs) for installing public EV charging stations to achieve the desired network coverage. OMCs with charging facilities should prominently advertise this on their signage to inform EV owners. Directional signs on nearby roads leading to charging stations will further enhance accessibility.
• Additional Locations: EV Charging stations can also be installed at (a) Group Housing Societies including Residential Societies; (b) Shopping malls; (c) Office complexes; (d) Restaurants and Hotels; (e) Educational institutions; and (f) Hospitals These charging stations should allow charging for visitor vehicles and be strategically located near entrances, exits, or well-lit elevator areas for optimal accessibility.

Our Comment: The MoP Guidelines are a welcome first step towards accelerating India’s transition to electric mobility, and aiding India in meeting its climate action commitments specified in the Paris Agreement, adopted at the UN Climate Change Conference (COP 21) in Paris on December 12, 2015.  As the United Nations Environment Programme[1] puts it “The transport sector is the fastest-growing greenhouse gas (GHG) emitting sector, expected to reach a share of more than 30% of total GHG emissions in the future. It is also a leading emitter of short-lived climate pollutants and it contributes greatly to air pollution. The global vehicle fleet is set to double by 2050, with more than 90 percent of future vehicle growth projected to take place in low and middle-income countries. To achieve a cleaner transport sector, a combination of measures needs to be implemented worldwide: better-designed cities; safe and comfortable walking and cycling facilities; more public transport; and cleaner and more efficient on-road fleets, including electric vehicles.”

Viewed in this light, the MoP Guidelines, if implemented in totality, can demonstrate India’s commitment to adhering to its climate action commitments. However, as with all well-intentioned legislation, the proof of the pudding will lie in its eating i.e. how different stakeholders such as Charge Point Operators, Distribution Licensees, State and UT Governments as well as civil society follow through and implement the above Guidelines will determine whether the MoP Guidelines are actually successful or merely a paper tiger!

[1] See “Supporting the global shift to electric mobility” at https://www.unep.org/topics/transport/electric-mobility/supporting-global-shift-electric-mobility-0

September 2024

Draft of Construction and Demolition Waste Management Rules, 2024 issued by Government of India

On July 29, 2024 The Ministry of Environment, Forests and Climate Change, Government of India (“MoEFCC”) published a notification, inviting comments or suggestions from the general on the proposed Construction and Demolition Waste Management Rules, 2024 (“Draft Rules”).

These rules are proposed to come into force from April 01, 2025. A few salient provisions of the Rules are outlined below:

(1) Who is a Producer of Waste? Rule 2 (o) of the Draft Rules define a ‘Producer’ as “a waste generator registered on the portal for a building and building complex project having built-up area of 20,000 (twenty thousand) square meters and above.” The portal in this rule refers to the centralised online interface developed by Central Pollution Control Board for the purposes of implementation of extended producer responsibility and waste utilisation framework, monitoring and enforcement of these rules, and to act as single point data repository on construction and demolition waste.

(2) Who is a Generator of Waste? Rule 2 (x) of the Draft Rules defines a ‘waste generator’ as “an occupier of the project having full control over the construction or reconstruction or demolition activity resulting in generation of waste.”

(3) Responsibilities of a Waste Generator: Rule 9 of the Draft Rules impose a responsibility on waste generators to (i) collect and segregate waste to facilitate reuse and recycling into separate material streams viz. concrete, soil, bricks, steel, wood, plastics etc.; (ii) store the waste and take measures for its recycling, either in-situ or channelize for off-site processing; (iii) transport entire (100%) waste to collection points or intermediate waste storage facility or hand over waste to an authorized agency or recycler, as appropriate; (iv) take measures to prevent air pollution, littering of waste and avoid public nuisance during collection, segregation, storage of waste; and (v) comply with the orders and directions of the implementing and enforcement agencies.

(4) Responsibilities of Producers: Rule 10 of the Draft Rules impose a responsibility on waste generators to (i) register on the portal, and comply with all obligations given under these rules; (ii) follow standard operating procedures, and measures prescribed by Central or State Pollution Control Board or Pollution Control Committees and implementing agency for environmentally sound management of waste; (iii) undertake demolition in compliance with ‘IS 4130: Safety code for demolition of buildings’ or any other standard operating procedures and measures put in place by the implementing or enforcement agency for demolition; and (iv) prepare an integrated waste management plan, with prior approval of implementing agency, of all construction activities in a single jurisdictional area.

(5) Extended Producer Responsibility (“EPR”) Obligation imposed on Producers: The Draft Rules propose that an EPR Obligation be imposed on a producer to manage Construction and Demolition Waste (“C&D Waste”). The Draft Rules prescribe the recycling targets to be fulfilled by the producer for compliance of its EPR.