New amendments by the MCA allow companies to utilize CSR funds through Zero Coupon Zero Principal instruments listed on the Social Stock Exchange, offering a regulated avenue for CSR investments.
CSR Funds Utilization via Social Stock Exchange
The Ministry of Corporate Affairs (MCA) has announced amendments allowing companies to allocate a portion of their CSR funds through Zero Coupon Zero Principal instruments that are listed on the Social Stock Exchange. This modification not only enhances the scope of CSR funds utilization but also introduces an additional regulated channel for investing in social initiatives.
This significant change reflects the government's intent to foster social entrepreneurship and sustainable business practices by allowing companies to directly support Non-Profit Organizations (NPOs) through recognized financial instruments.
Legal practitioners should guide their clients on these new avenues for CSR funding as it opens up innovative investment strategies while ensuring compliance with regulatory frameworks. The development also necessitates a review of existing CSR policies in light of these changes.
Citations
- CSR Amendment (2026) MCA
