UK’s Social Stock Exchange changes structure to becoming licensing body

Operations transition into a new firm called the Impact Investment Network

The UK’s Social Stock Exchange has restructured, with its operations and team moving into a new firm called the Impact Investment Network (IIN)

Speaking to RI, Debbie Ryan former managing director of the Social Stock Exchange (SSX), who is now CEO at IIN, said: “The Social Stock Exchange has changed the way it operates. It’s been split into two and the Social Stock Exchange itself will become a trust and a licensing body that will license out its accreditation methodology to partners that are either other stock exchanges or to financial institutions.”

She continued that SSX’s operations and management had been separated off and spun into the new company; it is the first license holder of the SSX in an exclusive arrangement for the next 12 months.

The Social Stock Exchange was co-founded in 2013 by Mark Campanale of Carbon Tracker fame and Pradeep Jethi, a former LSE executive. It was launched by then-Prime Minister David Cameron. Its CEO Tomas Carruthers, former CEO at online investment site Interactive Investor left last year, as did its chair Colin Melvin, former Global Head of Stewardship at Hermes Investment Management, who spent under a year in the role.

Ryan said the SSX shareholding remained the same. Social investor Big Society Capital has a £1.2m equity investment in SSX representing a 42% shareholding according to the most recent available data. It also has a £60,000 loan facility with SSX. Other co-investors include the Joseph Rowntree Capital Trust, the Golden Bottle Trust and Panahpur.

“The board and the shareholders wanted a new model that would help it scale,” said Ryan, a former Director of Rehabilitation and Resettlement at security firm G4S.“They wanted to be able to engage with multiple stock exchanges around the globe and they wanted to be able to realise its initial vision of getting as many impact businesses accredited as possible. They appointed me in June last year to do the review and make recommendations, which the board accepted. And it has gone through the transition over the past couple of months and IIN was licensed as its first licensed operator on January 26.”

SSX’s most recent accounts, for the year ending July 2016, say the independent auditors had doubt about the ability of the company to continue as a going concern. It made a loss of £712,086. In the same year, it repaid loans of £90,000 made in the previous years by Carruthers and director Stephen Brenninkmeijer.

The SSX will now transition into a trust with an independent admissions panel, chaired by sustainability expert John Elkington, that accredits social businesses.

SSX is in the process of appointing a new leader. Ryan described it as becoming an “impact setting standard organization”.

She said it would review what’s happening in terms of impact accreditation across the globe and then “refresh its methodology to be licensed out to multiple partners”.

INN is described as a “partnership of value driven businesses” that will offer access to public and private financial markets and accredit businesses.

It has an equity stake from consultancy Amberside Capital. Other partners include Investing for Good and Clubfinance Project Finance.