SEBI Proposes Changes To Block Deal Rules

The Securities and Exchange Board of India has proposed changes to the block deal framework. The suggestions talk of allowing large trades to be carried out through a single transaction without disrupting market prices.

Under the draft circular, block deals will only be permitted in two specific trading windows. The morning session will run from 8:45 am to 9:00 am, with trades executed at the previous day’s closing price.

The afternoon session has been proposed to open from 2:05 pm to 2:20 pm, with trades executed at the volume-weighted average price of trades between 1:30 pm and 2:00 pm. Exchanges will then calculate and publish this reference price between 2:00 pm and 2:05 pm.

Price limits have also been proposed. For stocks that are part of the futures and options (F&O) segment, trades must take place within 1% of the reference price. For all other stocks, trades must be within 3% of the reference price, subject to surveillance measures.

The minimum order size for a block deal has been proposed to be fixed at Rs 25 crore. All block deals must result in actual delivery of shares, meaning squaring off or reversing trades will not be allowed.

Exchanges will be required to disclose details of block deals, including the stock name, buyer and seller names, quantity, and price, after market hours on the same day.

In addition, stock exchanges, clearing corporations, and depositories must apply the same settlement, trading, and risk control measures to block deals as they do in the regular market.

The new rules will come into effect 30 days after SEBI issues the final circular. SEBI has invited public comments on the proposed changes until Sept 15, 2025, which can be submitted online or via email.