SEBI Revises Block Deal Framework: Rs 25 Crore Set As Minimum Trade Size

The Securities and Exchange Board of India on Wednesday revised the block deal framework. The regulator has set Rs 25 crore as the minimum order size for block deal trades, this is higher than the Rs 10 crore limit earlier.

The new framework will have tighter norms on trade execution, disclosure as well as settlement. This is to enhance transparency and market integrity. The revised norms will come into effect 60 days from the issuance of the circular.

The market watchdog, in its circular, said that every trade has to be executed in the block deal window and must result in compulsory delivery and cannot be squared off or reversed. In addition, the stock exchanges will now be required to disclose details of all block deals to the public on the same day after market hours. The details that have to be released include name of the scrip, client identity, quantity and traded price.

These rules will also apply to block deals executed under the optional T+0 settlement cycle.

The circular further added that the block deal orders will be placed within a 3% price band above or below the prevailing market price.

In the morning block deal window, trades will be executed between 8:45 a.m. and 9:00 a.m., with the closing price of the previous trading session as the reference for bloc deal execution. In the afternoon trades will be allowed between 2:05 p.m. and 2:20 p.m., with the volume-weighted average price in the cash segment from 1:45 p.m. to 2 p.m. as the reference for the execution of the deal, the circular said.

In addition, the exchanges will calculate and disseminate the applicable volume-average price between 2 p.m. and 2:05 p.m., ahead of the afternoon block deal window.

The regulator has also directed the bourses, depositories and clearing corporations to ensure that all applicable settlement, trading, risk-containment and surveillance measures should mirror those of the normal trading segment.