SEBI issues Procedure for Public Issuance of ZCZP instrument by NPOs

Current Context: On December 28, 2023, the Securities and Exchange Board of India (SEBI) notified a procedure for public issuance of Zero Coupon Zero Principal (ZCZP) Instruments by a Not for Profit Organization (NPO) and listing of such instruments on the Social Stock Exchange (SSE).

• ZCZP Instruments on the SSE are donation instruments offering no interest or principal return.
• Since it is a donation, not a loan or investment, the contributed funds will not be refunded to the donor.
• The procedure for Public Issuance of ZCZP Instruments by NPO is as follows:
• The NPO, via lead manager(s), submits the draft fundraising document to the registered SSE with specified fees and an application for in-principle approval.
• The draft document is posted on both SSE and the organization’s website for a minimum of 21 days for public comments.
• The SSE provides observations within 30 days of filing or receiving clarifications from the organization.
• The organization incorporates SSE’s observations into the draft fundraising document and submits the final version before initiating the issuance.

Question:

Q.1 What type of instruments did the Securities and Exchange Board of India (SEBI) notify a procedure for public issuance by a Not for Profit Organization (NPO)?
a. Interest-bearing Bonds
b. Zero Coupon Zero Principal (ZCZP) Instruments
c. Equity Shares
d. Mutual Funds