SEBI Revamps Block Deal Norms, Sets ₹25-Crore Minimum Trade Size

SEBI Sets ₹25-Crore Minimum Trade Size for Block Deals

The Securities and Exchange Board of India (SEBI) has overhauled the block deal framework, introducing a minimum trade size of ₹25 crore and two daily trading windows for large institutional transactions. The regulator also mandated full trade delivery, same-day disclosure of deal details, and inclusion of the revised norms under both T+0 and T+1 settlement cycles.

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The move follows recommendations from a working group, deliberations in SEBI’s Secondary Market Advisory Committee, and public feedback, according to a circular issued on Wednesday. SEBI stated that the revised framework aims to improve transparency, strengthen price discovery, and standardise large-volume trades in the equity cash market.

New Trading Windows and Pricing Norms Introduced

Under the new structure, block deals will operate 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. For the morning session, the reference price will be the previous day’s closing price, while the afternoon window will use the volume-weighted average price (VWAP) of trades executed between 1:45 pm and 2:00 pm. Stock exchanges will compute and publish the VWAP during a five-minute interval from 2:00 pm to 2:05 pm.

Orders placed in either window must remain within a price band of ±3% of the applicable reference price. SEBI emphasised that every trade executed under the block deal window must result in actual delivery and cannot be squared off or reversed.

Mandatory Disclosure and Market Preparedness

To enhance transparency, stock exchanges are required to disclose details of all block deals on the same day after market hours. The disclosure must include the name of the security, the client's name, the quantity of shares traded, and the price.

The revised norms will also extend to block deal windows under the optional T+0 settlement cycle, alongside the existing T+1 settlement cycle. Market infrastructure institutions, stock exchanges, clearing corporations, and depositories have been asked to implement necessary system changes, amend byelaws, and inform participants ahead of the launch.

The provisions of the circular are scheduled to come into effect 60 days after its issuance, allowing market participants sufficient time to adapt to the new framework.

Conclusion

SEBI’s new block deal norms aim to enhance transparency, standardise large trades, and strengthen price discovery in the equity cash market. With clearly defined windows, reference prices, and mandatory disclosure, the framework is expected to improve investor confidence and ensure smoother execution of institutional transactions.