The Securities and Exchange Board of India has increased the minimum block deal size to ₹25 crore from ₹10 crore, and has widened the price band within which block orders can be executed.
Block trades are executed in a special trading window, provided by the exchanges.
The new framework follows the consultation paper issued by SEBI last year.
The block deals will be conducted in the morning and in the afternoon. The morning window will operate from 8.45 to 9 am and the afternoon window between 2.05 pm and 2.20 pm.
Deal window details
For the morning deals, the reference price for execution of block deals would be the previous day’s closing price of the stock, and for the afternoon session the reference price for block deals in this window shall be the volume weighted average market price (VWAP) of the trades executed in the stock in the cash segment between 1:45 pm and 2 pm.
The orders will be within plus/minus 3 per cent of the relevant reference price, in order to allow for better price discovery.
Every trade executed in the block deal windows must result in delivery and shall not be squared off or reversed.
The new norms come into effect from the sixtieth day of issuance of the circular, said the regulator.