SEBI mulls revising block deal framework; minimal order measurement might enhance to 25 crore

Markets regulator SEBI has proposed elevating the minimal order measurement for execution of trades within the block deal home windows to ₹25 crore from the present ₹10 crore.

The current threshold had been in place since 2017.

A block deal is a big commerce of share that takes place between a purchaser and a vendor via a single transaction on the inventory change. It can solely be executed throughout a particular 15-minute window supplied by inventory exchanges twice a day.

In its session paper, Sebi proposed that “the minimum order size for execution of trades in the block deal windows shall be ₹25 crore. Every trade executed in the block deal windows must result in delivery and shall not be squared off or reversed.” Alongside the upper threshold, Sebi has proposed to assessment the pricing mechanism for such trades. It is considering widening the worth band to as much as 3 per cent for non-derivative shares, whereas retaining the prevailing 1% band for futures and choices (F&O) scrips.

This transfer is predicted to cut back the chance of market manipulation.

Currently, trades can solely be executed inside a 1% band on both facet of the day prior to this’s closing worth.

The session paper additional particulars the working hours of the block deal home windows. The morning session will run between 8:45 a.m. and 9 a.m., with trades executed at the day prior to this’s closing worth. The afternoon session, from 2:05 p.m. to 2:20 p.m., will use the quantity weighted common market worth (VWAP) of trades executed within the money phase between 1:30 p.m. and a pair of p.m. because the reference worth.

These home windows are designed to offer patrons and sellers a platform to execute giant share transactions which can be often negotiated prematurely.

To improve transparency, SEBI mentioned inventory exchanges would disseminate particulars such because the title of the scrip, shopper title, amount of shares, and the traded worth to the general public on the identical day after market hours.

The Securities and Exchange Board of India (SEBI) has sought public feedback until September 15 on the proposals.