Source: ET
Context:
The Securities and Exchange Board of India (SEBI) has proposed reforms to the block deal framework to strengthen market transparency and prevent manipulation in large equity transactions.
Key Highlights:
- Block Deal Definition:
- A large, single-share transaction executed between two parties during a designated trading window.
- Minimum Order Size:
- Proposed increase to ₹25 crore (from the existing ₹10 crore, in place since 2017).
- Pricing Mechanism:
- Non-F&O stocks: Proposed widening of price band to 3% from the previous day’s closing price.
- F&O stocks: Existing 1% price band to continue.
- Disclosures:
- Stock exchanges must disclose block deal details—including scrip name, client name, quantity, and price on the same day after market hours.
- Objective:
- Reduce market manipulation in large trades.
- Enhance transparency in equity markets.
Significance:
- Aligns Indian markets with global best practices for large transactions.
- Improves investor confidence and market integrity.
- Ensures better price discovery in block trades.
