Review of Block Deal Window Mechanism
Summary
This circular revises the block deal framework by introducing two distinct trading windows: a morning window from 08:45 AM to 09:00 AM and an afternoon window from 02:05 PM to 02:20 PM. It mandates that all block deals must have a minimum order size of Rs. 10 Crore, result in delivery, and be executed within ±1% of the applicable reference price. The document also outlines dissemination requirements for stock exchanges and sets the effective date as January 01, 2018.
Text
This window shall operate between 08:45 AM to 09:00 AM. The reference price for execution of block deals in this window shall be the previous day closing price of the stock.
This window shall operate between 02:05 PM to 2:20 PM. 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 01:45 PM to 02:00 PM.
The orders placed shall be within ±1% of the applicable reference price in the respective windows as stated above.
The minimum order size for execution of trades in the Block deal window shall be Rs.10 Crore.
Every trade executed in the block deal windows must result in delivery and shall not be squared off or reversed.
The stock exchanges shall disseminate the information on block deals such as the name of the scrip, name of the client, quantity of shares bought/sold, traded price, etc. to the general public on the same day, after the market hours.
The stock exchanges shall ensure that all appropriate trading and settlement practices as well as surveillance and risk containment measures, etc., as applicable to the normal trading segment are made applicable and implemented in respect of the block deal windows also.
This circular shall come into force with effect from January 01, 2018. The SEBI circular no MRD/DoP/SE/Cir-19/05 dated September 2, 2005 shall stand withdrawn with effect from January 01, 2018.
Stock Exchanges are advised to take necessary steps and put in place necessary systems for implementation of the above, make necessary amendments to the relevant bye-laws, rules and regulations, and bring the provisions of this circular to the notice of the member brokers.
Source: SecMarx — Review of Block Deal Window Mechanism. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.