N O T I C E
Dated :October 31, 2017
Trading Members are hereby informed that the Exchange has received a Circular from SEBI vide Ref. No. CIR/MRD/DP/118/2017, Dated October 26, 2017 regarding Review of Block Deal Window Mechanism. The contents of the said circular are reproduced hereunder for information of trading members.
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CIRCULAR
CIR/MRD/DP/118/2017
October 26, 2017
To
All Stock Exchanges (Except for Commodity Derivative
Exchanges)
Dear Sir/Madam,
Sub:
Review of Block Deal Window Mechanism.
1. SEBI vide circular
MRD/DoP/SE/Cir-19/2005 dated September 02, 2005 prescribed guidelines for
execution of large size trades through a single transaction. In order to
facilitate execution of such large trades, the stock exchanges were permitted
to provide a separate trading window. A trade executed on this separate trading
window was termed as ‘block deal’.
2. SEBI has been receiving
suggestions from market participants to review the block deal framework. The
suggestions received from market participants were examined and deliberated in
the Secondary Market Advisory Committee ("SMAC").
3. Based on the deliberations, it
has been decided to revise the framework for block deals by providing two block
deal windows as follows:
3.1. Morning Block Deal Window:
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. The stock exchanges shall set their trading hours between 08:45AM
to 5:00 PM with a stipulation that between 08:45AM and 09:00AM, the stock
exchanges shall operate only for executing trades in the block deal window.
3.2. Afternoon Block Deal Window:
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. Between the period 02:00 pm to 02:05 pm, the stock exchanges shall
calculate and disseminate necessary information regarding the VWAP applicable
for the execution of block deals in the Afternoon block deal window.
5. The orders placed shall be within ±1% of the
applicable reference price in the respective windows as stated above.
6. The minimum order size for
execution of trades in the Block deal window shall be Rs.10 Crore.
7. Every trade executed in the
block deal windows must result in delivery and shall not be squared off or
reversed.
8. 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.
9. 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.
10. 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. The circular no SEBI/DNPD/Cir-47/2009 dated October 23,
2009 shall stand modified accordingly to enable opening of morning block deal
window.
11. Stock Exchanges are advised to:
a.
take necessary steps and put in place necessary systems for implementation of
the above.
b.
make necessary amendments to the relevant bye-laws, rules and regulations for
the implementation of the above decision.
c. bring
the provisions of this circular to the notice of the member brokers of the stock
exchange and also to disseminate the same on the website.
12. This circular is being issued
in exercise of powers conferred under Section 11 (1) of the Securities and
Exchange Board of India Act, 1992 to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
market.
Yours faithfully,
Susanta
Kumar Das
Deputy General Manager
susantad@sebi.gov.in
Trading
Members are requested to take note of the aforesaid guidelines of SEBI and act
accordingly.
M.A.V. Raju
General
Manager