SEBI Issues Draft Circular To Revise Block Deal Framework

Consultation Paper Dated 22.08.2025

1. SEBI Issues Draft Circular on Block Deal Framework

The Securities and Exchange Board of India (SEBI) has released a draft circular seeking public comments on the proposed review of the block deal framework. Stakeholders can submit their feedback by September 15, 2025. The draft aims to bring greater transparency, efficiency, and fairness in large-volume transactions conducted through block deals.

2. Introduction of Dual Block Deal Windows

The draft circular proposes the introduction of two dedicated block deal windows. The morning window will be available from 8:45 AM to 9:00 AM, with the previous day’s closing price serving as the reference. The afternoon window will operate from 2:05 PM to 2:20 PM, and the price reference will be linked to the Volume Weighted Average Price (VWAP) of trades executed between 1:30 PM and 2:00 PM. This dual-window approach aims to provide flexibility and better price discovery for market participants.

3. Price Bands and Trade Conditions

Under the proposed framework, orders placed in the block deal windows will be subject to specific price bands. For F&O stocks, trades must be executed within +1% of the applicable reference price. For other than F&O stocks, the permissible range will be +3% of the reference price, subject to surveillance measures where necessary. Additionally, the draft mandates that all trades executed in these windows must result in compulsory delivery, ensuring that trades cannot be squared off or reversed.

4. Minimum Trade Size and Applicability

To ensure that block deals remain restricted to large-volume institutional trades, SEBI has prescribed a minimum order size of ₹25 crores for execution in the block deal windows. This threshold is expected to deter smaller speculative trades and maintain the integrity of the framework. Once finalized, the provisions of the circular will come into effect from the 30th day of its issuance, providing market participants sufficient time to adapt to the new requirements.

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