SEBI vide its notification dated 25th July, 2022 has made amendments in the SEBI (ICDR) Regulations, 2018, and SEBI (LODR) Regulations, 2015. These amendments have been made to provide Social Enterprises with additional avenues to raise funds through the Social Stock Exchange (SSE), which is a novel concept in India. It provides eligibility of organizations to raise funds through Social Stock Exchange, eligibility of entities to be classified as “Not for Profit Organization”, eligibility of entities to be classified as “For Profit” Social Enterprises, means through which Social Enterprises can raise funds, and obligations of Social Enterprises.
Furthermore, to strengthen the governance framework in these entities, & provide better confidence to such investors, SEBI has introduced the concept of Annual Impact Report by a Social Auditor. The purpose of this Social Audit is to ascertain the impact made by the Social Enterprise through its activities, intervention, programs or projects implemented during the reporting period. The annual impact report shall be audited by a Social Auditor.
ICMAI Social Auditors Organization (ICMAI SAO)
To enrol & regulate the Social Auditors and also to prescribe the Social Audit Standards, the Institute of Cost Accountants of India, in compliance with SEBI Regulations, has incorporated a section 8 company titled ICMAI Social Auditors Organization. The ICMAI SAO will enrol eligible CMAs & others as Social Auditors and focus on their capacity building through continuous professional advancement with emphasis on adherence to the highest ethical standards and compliance with the Social Stock Exchange requirements.
It is expected that large number of Social Enterprises, both not for profit and for profit, will take advantage of the newly created architecture for raising funds through the mechanism of Social Stock Exchange (SSE). Each such Social Enterprise would be required to submit an Annual Impact Report to the SSE duly audited by a Social Auditor. Hence, there would be huge opportunities for the CMAs to practice as Social Auditors.
Eligibility Criteria for Social Auditor
A. An Individual if he
a. holds the required qualification and experience;
b. have attended a course at the National Institute of Securities Markets (NISM) and received a certificate of completion after successfully passing the course examination; and
c. is registered with a Self-Regulatory Organisation (SRO) [e.g., ICMAI Social Auditors Organization]
B. A Firm/Institution that has partners/employees who meet with the criteria for being a social auditor and has a track record of minimum three years for conducting social impact assessment.
Eligibility Qualification & Experience for Social Auditor
i. Post-graduates from universities recognized by University Grants Commission (UGC) with a minimum of 3 years of experience in the development sector, or
ii. Graduates from universities recognized by the UGC with a minimum of 6 years of experience in the development sector, or
iii. Cost and Management Accountant, Chartered Accountant, or Company Secretary holding valid Certificate of Practice.
About NISM Social Auditors Certification Examination
As mandated by SEBI, NISM Social Auditors Certification Examination aims to create a pool of social auditors who would assess the impact of social interventions of various social enterprises who raise funds through the Social Stock Exchange platform.
How to register for NISM-Series-XXIII: Social Auditors Certification Examination?
Interested can register at NISM Website After successful registration, they may select a test centre, date and time slot of their choice on the Test Administrator website and follow further instructions available on the Test Administrator.
Fee structure: The fees for “NISM-Series-VIII: Social Auditors Certification Examination” is Rupees One Thousand Five Hundred only (Rs.1500/-) plus applicable GST.
Test details & Assessment structure: The examination will have 85 multiple-choice and 3 case-based questions (each case having 5 questions) totaling to 100 marks. Exam should be completed in 2 hours. There will be negative marking of 25% of the marks assigned to a question. The passing score for the examination is 60%.
Study material for preparing for this examination: You will receive a soft copy of the workbook/study material after enrolment for the examination. For non-receipt of a soft copy of the workbook/study material, you may contact NISM
Facilitation of CMAs for becoming Social Auditors
ICMAI Social Audit Organization is initiating a Preparatory education course for facilitating the preparation of CMA members for passing the Social Auditors certification course being conducted by NISM. This will be purely voluntary / optional course which the members may or may not join. The details of the course shall be shared shortly. ICMAI SAO is also in the process of compiling relevant study material for the NISM certification exam.