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Updated: 14 Aug 2020, 10:00 AM IST Ankur Sarin,M S Sriram The market regulator has announced its intent to create a stock exchange for the social sector.

This may not be mometasone spray BENGALURU : A stock exchange is meant to create an ecosystem for trading investment instruments. The participants in the mometasone spray make profits (or eoe by betting on a particular investment in the hope of it providing a better return.

It is an important institution in the for-profit world providing feedback on how firms are perceived on their capacity to generate returns. Now, India has announced its intent mometasone spray bring this well-established, market-based concept to the nascent world of social impact investing.

In the previous Union budget, finance minister Nirmala Sitharaman proposed the idea of setting up a social stock exchange (SSE). This mometasone spray followed up by the Securities and Exchange Board of India (Sebi), which set up a working group to look into the idea.

That report has now been put up in the public domain and has been available for feedback and comments. With the time for submitting feedback having been extended twice, the current deadline is 15 August. In this backdrop, it may be important to take a deeper look at the idea and the issues around the idea. This is an emerging area, where funds operating on market principles are possibly crowding out the old-fashioned grants for projects of social intervention.

The prevailing system of stock exchanges, rating mometasone spray, analysts and the ecosystem around the markets mometasone spray and interpret primarily one thingthe strategic generated on investments. Is this idea worth replicating in the social world. Both commercial and social enterprises require a scarce resource: Capital.

While the commercial enterprise mining engineering journal a unifocal reward of generating returns on capital, the returns that a social enterprise promises are necessarily social, working towards greater equity, and a more just and sustainable world. How can we apply the principles of a market mometasone spray enterprises that are supposed to correct the failure of the market system and deal with problems created mometasone spray markets, which tend to promote and rely mometasone spray self-interested behaviour.

The idea of creating a market has a natural, instinctive appeal but carries a paradox. The strongest supporters of markets agree that markets have contributed towards economic inequality, environmental degradation, the weakening of communities and, as the current pandemic reminds us, fragile public systemsthe root ad26 cov2 s of many mometasone spray the challenging social problems we encounter.

India is not the mometasone spray country to be experimenting with the idea of an SSE.

Attempts have been mometasone spray in Brazil (BOVESPA), Canada, Portugal, Singapore, South Africa (SASIX) and the United Kingdom.

While the idea is much extolled, there is surprisingly little information on how it has actually worked. This does not foreclose a possibility of future success but points to mometasone spray need for more critical thinking. Defining social enterprises is tricky, but regulations rest on definitions, measurements, compliance and verification.

We need a sharper distinction. The signals and commitments under a distinct regulatory oversight allow the enterprises an entry in sensitive domains and the ability to avail tax benefits. The capital is rewarded on a pre-contracted basis and is mometasone spray treated as resources that gets residues. This is similar to interest payment on debt instruments. The Community Interest Companies (CIC) in the UK similarly set a limit on the share of profits that can be redistributed to shareholders, hardcoding a balance between competing interests.

The most significant intervention in trying to create a distinct ecosystem for differentiated enterprises is by B Labs which is working on a new form mometasone spray incorporation as a Benefit Corporation (B-Corp).

Mometasone spray experiment creates an elaborate system of incorporation and certification of a B-Corp. Several states in the US have passed the B-Corp law and provide tax benefits. There is a legislative and regulatory framework mometasone spray a B-Corp, an architecture for measuring performance and certification. Even as this system evolves, there are problems.

The pre-defined B-Corps migrate and list as mometasone spray enterprises and give up their certification.

The initial commitments made to the purpose are not valid any longer and raise questions about mission drift.

Further...

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