SEBI Tightens Block Deal Rules; Raises Minimum Trade Size to ₹25 Crore

The Securities and Exchange Board of India (SEBI) has introduced a revamped block deal framework aimed at strengthening market transparency, settlement discipline, and investor protection. The updated guidelines, announced through a circular, mandate tighter rules on execution, disclosure, and settlement of large trades.

Under the new norms, the minimum order size for block deals will rise to ₹25 crore, up from the existing threshold of ₹10 crore. The enhanced requirements seek to ensure fair price discovery and prevent any misuse of the block deal mechanism for speculative trading.

The revised framework will take effect 60 days from the issuance of the circular, giving stock exchanges and market participants time to align systems with the new requirements.

Key Changes in SEBI’s Revised Framework

The minimum block deal size has been raised from ₹10 crore to ₹25 crore, limiting participation to large institutional investors and high-value trades. This move is expected to curb small-scale speculative activity within the block window and improve overall trade integrity.

All block deal trades must result in compulsory delivery, according to SEBI. Squaring off or reversing trades within the block window will not be permitted. This measure reinforces SEBI’s focus on discouraging intraday adjustments and ensuring that trades are executed with genuine intent.

Trading Windows and Price Bands

Morning Session

The morning block deal window will operate between 8:45 am and 9:00 am, with the previous day’s closing price serving as the reference rate.

Afternoon Session

The afternoon block deal window will be open from 2:05 pm to 2:20 pm. Trades in this session will be benchmarked to the volume-weighted average price (VWAP) of the stock in the cash segment between 1:45 pm and 2:00 pm.

Exchanges will calculate and disseminate the VWAP between 2:00 pm and 2:05 pm ahead of the afternoon window to ensure consistent price reference points.

Operational Alignment and Surveillance

SEBI has directed stock exchanges, clearing corporations, and depositories to align their trading, settlement, surveillance, and risk-containment measures for block deals with those applicable in the normal trading segment.

This ensures uniformity across trading platforms and mitigates risks associated with large transactions. Enhanced surveillance is expected to detect and deter coordinated trades or potential market abuse.

Read More: SEBI Deploys Validated UPI Handles to Boost Investor Scams

Conclusion

SEBI’s decision to tighten the block deal framework represents a major step toward improving market integrity and transparency in large-value transactions. By raising the minimum trade size to ₹25 crore, mandating delivery-based settlements, and strengthening disclosure norms, the regulator aims to ensure that the block deal window serves its original purpose, facilitating genuine institutional trades without distorting market prices.

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