ZCZP Instruments Allowed as CSR Spend on Social Stock Exchanges
Why in the news
The corporate affairs ministry widened the list of ways companies can meet their CSR obligations by recognising ZCZP instruments traded on Social Stock Exchanges.
Key facts
- Authority: Ministry of Corporate Affairs (MCA), through an amendment to the CSR framework of the Companies Act.
- New eligible activity: buying Zero Coupon Zero Principal (ZCZP) Instruments listed on Social Stock Exchanges (SSEs).
- Effect: firms can route CSR money to eligible not-for-profit organisations via regulated financial instruments.
- Limit: ZCZP route is capped at 10% of annual CSR spending.
| Feature | Detail |
|---|---|
| Instrument | Zero Coupon Zero Principal |
| Where listed | Social Stock Exchanges |
| Beneficiaries | Eligible not-for-profit organisations |
| Ceiling | 10% of annual CSR expenditure |
Exam angle
- Ministry in charge: MCA.
- Abbreviation to learn: ZCZP and SSE.
- Number to remember: 10% cap.