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PRESS RELEASE PR No.112/2005 Block Deals
1. SEBI had issued a circular (reference no. SEBI/MRD/SE/Cir-7/2004) on January 14, 2004 on disclosures of details of “bulk” deals with a view to impart greater transparency to the market on such transactions executed on the stock exchanges. In terms of paragraph 1.1 of that circular, a “bulk” deal constituted of “all transactions in a scrip (on an exchange) where total quantity of shares bought/sold is more than 0.5% of the number of equity shares of the company listed on the exchange”. Thus the quantitative limit of 0.5% could be reached through one or more transactions executed during the day in the normal market segment.
2. There is however a felt need of the market to execute large trades through a single transaction easily without putting either the buyer or the seller in a disadvantageous position. In order to facilitate execution of such large trades, the stock exchanges are being permitted to provide a separate trading window. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separate window of the stock exchange will constitute a “block deal” as distinguished from “bulk” deal defined earlier.
3. The said window will be kept open for trading for a limited time period of 35 minutes from the beginning of trading hours i.e. from 9.55 a.m. to 10.30 a.m. A single block deal order in this window has to be for a minimum quantity of 5 lakh shares or minimum value of Rs 5 crore. Also orders may be placed in this window at a price not exceeding ± 1 % from the ruling market price / previous day closing price. Every trade executed in this window must result in delivery and shall not be squared off or reversed. Disclosure of all trades in this window and its dissemination to general public has been mandated.
4. The stock exchanges have to ensure that all appropriate trading and settlement practices as well as surveillance and risk containment measures, etc., as presently applicable to the normal trading segment are made applicable and implemented in respect of the proposed special window also.
5. 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.
6. There is no change in regard to the disclosure of trade details of ”bulk deals” as specified in the earlier SEBI circular reference no. SEBI/MRD/SE/ Cir -7/2004 dated January 14, 2004, and such disclosures shall be continued to be made by the stock exchanges to the general public on the same day after the market hours.
The circular issued to stock exchanges in this regard is available on the website: www.sebi.gov.in
Mumbai September 02, 2005 |