Sebi Revamps Block Deal Framework for Stock Exchanges

Sebi has revamped the block deal framework for stock exchanges, setting a minimum trade size of Rs 25 crore and introducing tighter price limits with two trading windows. These reforms are designed to improve transparency and efficiency in large trades. The new norms take effect 60 days post-announcement.

Sebi, the markets regulator, has introduced a significant overhaul of the block deal framework for stock exchanges, setting new norms that promise to enhance transparency and efficiency. A minimum trade size of Rs 25 crore has been established, along with the introduction of two trading windows complemented by tighter price limits and enhanced disclosure norms.

The reforms see the introduction of two distinct trading windows for large trades—a morning session from 8:45 am to 9:00 am, and an afternoon session from 2:05 pm to 2:20 pm. These changes aim to streamline the process of executing large trades, with reference prices based on previous market performances and volume-weighted averages.

To ensure strict adherence to these changes, Sebi requires all block trades to be within a 3% price band of the applicable reference price, with minimum order sizes now increased to Rs 25 crore. Stock exchanges have been instructed to disclose details of block deals, ensuring greater transparency to the public, with these changes set to come into effect 60 days from the circular's issuance.

(With inputs from agencies.)