CSR Framework Expanded to Include Social Stock Exchange Instruments

CSR Framework Expanded to Include Social Stock Exchange Instruments

  • Regulatory Updates
  • June 1, 2026

REGULATORY UPDATE

MCA | CSR Framework Expanded to Include Social Stock Exchange Instruments

CSR_Notification_May 2026

Key Highlights

  • Schedule VII Amended: MCA has inserted a new item in Schedule VII of the Companies Act, 2013, expressly recognizing subscription to Zero Coupon Zero Principal (ZCZP) Instruments listed on the Social Stock Exchange (SSE) as an eligible CSR activity.
  • CSR Through ZCZP Instruments Permitted: Companies may now undertake CSR expenditure through subscription to ZCZP Instruments issued by eligible Not-for-Profit Organisations (NPOs) registered on the SSE.
  • 10% Cap Introduced: Expenditure through ZCZP Instruments cannot exceed 10% of the company’s total CSR obligation for the relevant financial year.
  • Impact Assessment Exemption: Companies subscribing to ZCZP Instruments will not be required to undertake impact assessment for projects funded through such instruments.
  • New Definitions Introduced: The CSR Rules now incorporate definitions of “Not for Profit Organisation” and “Zero Coupon Zero Principal Instrument” by reference to the SEBI Social Stock Exchange framework.
  • Conditions for NPO Issuers:

 

  • Projects funded through ZCZP Instruments must be completed within a period not exceeding three succeeding financial years from issuance.
  • Upon termination of listing, any unspent amount must be transferred to a Schedule VII fund and a compliance report submitted to SEBI.
  • Integration of CSR and SSE Frameworks: The amendments formally align the Companies Act CSR regime with SEBI’s Social Stock Exchange ecosystem and create a new channel for mobilising CSR capital towards social impact projects.

Effective Date: 27 May 2026

Why It Matters

This is a landmark development for the Social Stock Exchange ecosystem. The amendments provide statutory recognition to SSE-based CSR funding, expand fundraising avenues for NPOs, reduce compliance burden for corporates through impact assessment exemption, and encourage greater participation in impact-focused financing.

(Shared for awareness and professional update.)

RV FCS Abhinav Agarwal

Partner

Atulya Corporate Advisors LLP & CorpValuers

Corporate Law Advisors & Registered Valuers (IBBI – SFA)

abhinav@atulyadvisors.com | connect@corpvaluers.com

Share to :

CSR Framework Expanded to Include Social Stock Exchange Instruments

CSR Framework Expanded to Include Social Stock Exchange Instruments

  • Regulatory Updates
  • June 1, 2026

REGULATORY UPDATE

MCA | CSR Framework Expanded to Include Social Stock Exchange Instruments

CSR_Notification_May 2026

Key Highlights

  • Schedule VII Amended: MCA has inserted a new item in Schedule VII of the Companies Act, 2013, expressly recognizing subscription to Zero Coupon Zero Principal (ZCZP) Instruments listed on the Social Stock Exchange (SSE) as an eligible CSR activity.
  • CSR Through ZCZP Instruments Permitted: Companies may now undertake CSR expenditure through subscription to ZCZP Instruments issued by eligible Not-for-Profit Organisations (NPOs) registered on the SSE.
  • 10% Cap Introduced: Expenditure through ZCZP Instruments cannot exceed 10% of the company’s total CSR obligation for the relevant financial year.
  • Impact Assessment Exemption: Companies subscribing to ZCZP Instruments will not be required to undertake impact assessment for projects funded through such instruments.
  • New Definitions Introduced: The CSR Rules now incorporate definitions of “Not for Profit Organisation” and “Zero Coupon Zero Principal Instrument” by reference to the SEBI Social Stock Exchange framework.
  • Conditions for NPO Issuers:

 

  • Projects funded through ZCZP Instruments must be completed within a period not exceeding three succeeding financial years from issuance.
  • Upon termination of listing, any unspent amount must be transferred to a Schedule VII fund and a compliance report submitted to SEBI.
  • Integration of CSR and SSE Frameworks: The amendments formally align the Companies Act CSR regime with SEBI’s Social Stock Exchange ecosystem and create a new channel for mobilising CSR capital towards social impact projects.

Effective Date: 27 May 2026

Why It Matters

This is a landmark development for the Social Stock Exchange ecosystem. The amendments provide statutory recognition to SSE-based CSR funding, expand fundraising avenues for NPOs, reduce compliance burden for corporates through impact assessment exemption, and encourage greater participation in impact-focused financing.

(Shared for awareness and professional update.)

RV FCS Abhinav Agarwal

Partner

Atulya Corporate Advisors LLP & CorpValuers

Corporate Law Advisors & Registered Valuers (IBBI – SFA)

abhinav@atulyadvisors.com | connect@corpvaluers.com

Share to :

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