Ministry of Corporate Affairs (MCA) permits 10% CSR allocation for Social Stock Exchange instruments

Key facts

• The Ministry of Corporate Affairs (MCA) allows companies to deploy up to 10% of their annual Corporate Social Responsibility (CSR) expenditure through subscription to zero coupon zero principal (ZCZP) instruments listed on the Social Stock Exchange (SSE).
• The MCA introduced Rule 4A in the CSR Rules, 2014, and amended Schedule VII of the Companies Act, 2013, with both notifications coming into force on May 27, 2026.
• ZCZP instruments are securities issued by Not for Profit Organisations (NPOs) registered with the SSE segment of a recognised stock exchange in accordance with Securities and Exchange Board of India (SEBI) regulations.
• Companies subscribing to ZCZP instruments are exempted from undertaking impact assessments of the projects funded by such instruments.
• Issuing NPOs must ensure project durations do not exceed three succeeding financial years and are required to submit a compliance report to SEBI.