Ministry of Finance, vide SEBI notification dated 15th July, 2022 declared Zero coupon Zero principal instrument as securities.
The Notification further added that for the purpose of this notification “zero coupon zero principal instrument” means an instrument issued by a Not for Profit Organisation which shall be registered with Social Stock Exchange segment of a recognised Stock Exchange in accordance with the regulations made by the Securities and Exchange Board of India.
This notification can help non-profit organisations to get funds in a more transparent manner and will also help corporates to utilize their fund marked for social responsibility. It is to be noted that, neither any interest is paid nor principal is repaid under Zero coupon Zero principal instrument.
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