- The minimum order size for a block deal has been raised to ₹25 crore.
- The permissible price range for placing orders has been tightened to +/- 3% of the reference price.
- Two distinct block deal windows are defined: Morning (8:45-9:00 AM) and Afternoon (2:05-2:20 PM).
- The reference price for the afternoon window will now be based on the afternoon VWAP, not the morning's.
- The new rules will apply to both T+1 and the optional T+0 settlement cycles.
Source: SEBI
The Securities and Exchange Board of India (SEBI) has announced a significant revamp of the Block Deal Framework for stock exchanges. In a move designed to enhance the efficiency and transparency of large-scale trades, the market regulator has increased the minimum order size for a block deal to ₹25 crore and introduced a tighter price band of +/- 3%.
The updated framework, which was finalized after recommendations from a working group and SEBI’s Secondary Market Advisory Committee (SMAC), modifies the trading windows, reference prices, and price ranges for these large transactions. These new rules will apply to both the standard T+1 settlement cycle and the optional T+0 settlement cycle, ensuring uniformity across the market.
Block deals are single, large trades executed through a separate trading window, designed to prevent the significant price fluctuations that such large orders might otherwise cause in the regular market.
The New Block Deal Mechanism Explained
The most critical changes are to the timing, reference price, and price limits of the two block deal windows. SEBI has provided a clear structure for both the morning and afternoon sessions.
| Feature | Morning Block Deal Window | Afternoon Block Deal Window |
|---|---|---|
| Operating Hours | 8:45 AM – 9:00 AM | 2:05 PM – 2:20 PM |
| Reference Price | Previous day’s closing price of the stock. | Volume Weighted Average Price (VWAP) of the stock between 1:45 PM and 2:00 PM on the same day. |
| Price Range | Orders must be within +/- 3% of the reference price. | Orders must be within +/- 3% of the reference price. |
Other Key Changes and Mandates
Beyond the window timings and price, the revised framework includes several other important conditions:
- Minimum Order Size: The minimum value for a trade to qualify as a block deal has been significantly increased to ₹25 crore.
- Mandatory Delivery: Every trade executed through the block deal windows must result in the delivery of shares. These trades cannot be squared off or reversed, ensuring they are for genuine investment or divestment purposes.
- Public Disclosure: Stock exchanges are required to disseminate key information about block deals—including the stock name, client name, quantity of shares, and traded price—to the public on the same day after market hours.
- Surveillance: All existing surveillance, risk management, and settlement practices applicable to the normal trading segment will also apply to the block deal windows.
Implementation Timeline
The new provisions will come into effect on the 60th day from the issuance of the circular. All market infrastructure institutions, including stock exchanges and clearing corporations, have been directed to amend their rules and systems to implement these changes.
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