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The block deals platform on the exchanges will have two separate windows hereafter. The Securities and Exchange Board of India on Thursday revised the framework for block deals by providing two separate 15-minute windows. Also, the minimum order size has also been doubled to ₹10 crore.
The new block deal mechanism will to come into effect from January 1, 2018.
Under the new rules, the morning window would operate between 8.45 am and 9 am and the afternoon session between 2.05 pm and 2.20 pm.
While the previous day’s closing price of the stock would be the reference price for execution of block deals for morning session, it would be the volume weighted average market price (VWAP) of the trades executed in the cash segment between 1.45 pm and 2 pm for afternoon session.
“Between the period 2 pm and 2.05 pm, stock exchanges shall calculate and disseminate necessary information regarding the VWAP applicable for the execution of block deals in the afternoon block deal window,” the SEBI circular said.
Currently, the block deals are conducted 35 minutes between 9.15 am and 9.50 am.
5 lakh shares or ₹5 cr value“A trade, with a minimum quantity of 5 lakh shares or minimum value of ₹5 crore executed through a single transaction on this separate window of the stock exchange will constitute a block deal. The stock exchanges shall disseminate the information of block deal such as the name of the security, name of the client, quantity of shares brought/sold, traded price, etc to the general public on the same day, after the market hours,” BSE website said.
SEBI circular further said, every trade executed in the block deal windows must result in delivery and would not be squared off or reversed.
The market regulator also asked exchanges to ensure that all appropriate trading and settlement practices as well as surveillance and risk containment measures, as applicable to the normal trading segment, are made applicable and implemented in respect of the block deal windows as well.
The new move is aimed at ensuring confidentiality of the large trades and stable prices for such transactions, the regulator said. The decision has been taken as SEBI received suggestions from market participants to review the block deal framework.
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