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SEBI issues Procedure for Public Issuance of ZCZP instrument by NPOs

Published on December 30, 2023
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).
SEBI issues Procedure for Public Issuance of ZCZP instrument by NPOs
  • 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

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