SEBI sets ₹25-crore minimum trade size for block deals, introduces new trading windows

The Securities and Exchange Board of India (SEBI) has revised the framework governing large institutional trades, setting a minimum trade size of ₹25 crore for block deals and introducing new operating windows with tighter pricing limits.

The overhaul follows recommendations from a working group, discussions in SEBI’s Secondary Market Advisory Committee, and public feedback, according to a circular issued on Wednesday.

Under the new framework, block deals will be conducted in two separate trading windows: a morning window from 8:45 am to 9:00 am, and an afternoon window from 2:05 pm to 2:20 pm.

The reference price for the morning window will be the previous day’s closing price, while for the afternoon window, it will be the volume-weighted average price (VWAP) of trades executed between 1:45 pm and 2:00 pm, SEBI said.

Stock exchanges will compute and publish the VWAP during the five-minute interval between 2:00 pm and 2:05 pm.

Orders placed in either window must be within a price band of plus or minus 3% of the applicable reference price.

Every trade executed under the block deal window must result in actual delivery and cannot be squared off or reversed, the regulator added.

The stock exchanges will be required to disclose details of all block deals, including the name of the security, client name, quantity of shares traded, and price, on the same day after market hours.

SEBI said the revised norms would also apply to block deal windows under the optional T+0 settlement cycle, in addition to the existing T+1 settlement cycle in the equity cash market.

The market infrastructure institutions, stock exchanges, clearing corporations and depositories, have been asked to make necessary system changes, amend byelaws and inform market participants ahead of implementation, the regulator said.

The provisions of the circular will be applicable from the 60th day of issuance of the circular, it added.