Rod Schwartz, chief executive of Catalyst Fund Management and Research, which raises venture capital for social businesses, said social financiers should resist the temptation to be lured into such a scheme, despite political and private interest.
"The social capital market is still very immature," Schwartz said. "An exchange could easily disrupt and displace many things that are already happening by pulling away resources."
Schwartz also pointed out that most new markets fail - there were two botched attempts to start the Alternative Investment Market before it succeeded.
"The social stock exchange has a particularly high chance of failing because we can't even agree on what a social business is," he said.
Schwartz said that, even if the market worked, there was a danger that enterprises would be marginalised. "You would end up drawing social companies away from major capital markets into a tiny backwater," he said. "This would be bad for some businesses that might be able to flourish in the mainstream markets."
Phil Hope, Minister for the Third Sector, recently said the exchange was a "controversial idea" but acknowledged that it had "real merit in terms of opening up new investment opportunities for the capital market".
A spokesman for the Office of the Third Sector said: "The Government is attracted to the idea of a social stock exchange, but more needs to be done before any commitments are made."