Securities and Exchange Board of India (SEBI) notification: F. No. SEBI/LAD-NRO/GN/2022/90 of 25 July, 2022 on the Issue of Capital and Disclosure Requirements (Third Amendment) Regulations by social enterprises has set the tone for the formation of the Social Stock Exchange in India, as a separate segment of a recognized stock exchange, to facilitate fundraising by social enterprises, both for-profit as well as not for profit organisations.
To establish the primacy of its social intent, of the projects/programs/activities of social enterprises, SEBI came up with a new class of auditors, the social auditors. As per the recent SEBI notification, a social auditor is defined as an individual registered with a self-regulatory organization (SRO) under the Institute of Chartered Accounts of India (ICAI). To pursue the role of a social auditor, an individual must qualify a certification program to be conducted by the National Institute of Securities Market (NISM) and hold a valid certificate. ICAI is very closely working with NISM in developing the course curriculum and the study material for the social auditor’s certification program.
The Council of ICAI recently approved the formation of SRO for the social auditors as envisaged in the SEBI notification dated 25 July, 2022 mentioned above. The SRO is proposed to be named as “Institute of Social Auditors of India” and will be set up as a Section 8 company under the Companies Act, 2013, under the aegis of ICAI.
On this occasion, CA. (Dr.) Debashis Mitra, President, ICAI, mentioned that “ICAI has decided to form SRO with the vision to be a leading institution for the development of an independent, ethical, and world-class social auditors’ profession responding to needs and expectations of the stakeholders.” He complimented Sustainability Reporting Standards Board of ICAI for working relentlessly to ensure the formation of SRO promptly.
The proposed, SRO will focus on capacity building of social auditors through continuous professional advancement with a focus on adherence to the highest ethical standards and compliance with the letter and spirit of social stock exchange requirements. Capacity building is an ongoing process in any new market segment. ICAI is the regulator of the accountancy profession in India and has the resources and experience in meeting such challenges. ICAI has been working in this direction since over past seven decades and will meet the expectations of the stakeholders.