New Delhi, Feb. 9 -- The Securities and Exchange Board of India (Sebi) has proposed sweeping changes to India's Social Stock Exchange framework, including sharply lowering the minimum investment in social impact funds (SIFs) and easing fund-raising norms for not-for-profit organizations (NPOs) with an aim to broaden participation and improve capital access.

In a consultation paper issued on Monday, the market regulator recommended reducing the minimum investment by individual investors in SIFs from Rs.2 lakh to just Rs.1,000, a dramatic cut intended to bring small investors into the social finance ecosystem.

Social impact funds, a sub-category of alternative investment funds, are permitted to invest exclusively in securities issued by n...