Voluntary groups plan rule book for Social Stock Exchange

Members of UK exchange will have primarily social or environmental purpose, says chief executive

A new research project launched by a group of voluntary organisations is to draw up a rule book for a Social Stock Exchange in the UK.

The exchange, when it launches, will list companies that exist for primarily social purposes. It is in the process of raising about £2m in order to get off the ground, and is understood to have so far received firm commitments of about £500,000. Social stock exchanges already exist in Portugal and Brazil.

The latest research, funded by the Calouste Gulbenkian Foundation and being carried out by third sector support charity Can, will look at which rules companies will have to follow to join the exchange and how its members can be more transparent about their social impact.

The rules will also provide a code of conduct for traders on the exchange, and will cover concepts such as short-selling and issuing different classes of shares.

"What makes a social stock exchange different from normal stock exchanges is that it is able to authenticate its issuers as being primarily for social or environmental purposes," said Pradeep Jethi, chief executive of the exchange.

"The research into and development of a unique set of admissions rules, trading rules and disclosure rules is fundamental to this differentiation."

The rule book would need to be ratified by the Financial Services Authority before the exchange could be launched, he said.

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Calouste Gulbenkian Foundation

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