SEBI Revises Framework for Block Deals- Meaning, Analysis and Impact

The Securities and Exchange Board of India (SEBI) has recently issued a circular dated October 8, 2025 (SEBI/HO/MRD/POD-III/CIR/P/2025/134), announcing a comprehensive review and modification of the Block Deal Framework on stock exchanges. This review follows the recommendations of the Working Group, deliberations by the Secondary Market Advisory Committee (SMAC), and inputs from public consultations.

The updated framework aims to enhance transparency, efficiency, and operational flexibility for large trades while maintaining robust surveillance and risk management standards.

Understanding Block Deals

A block deal refers to the execution of large trades through a single transaction without putting either the buyer or seller at a disadvantage. These trades are typically conducted between institutional investors, large corporates, or high-net-worth individuals and are executed through a separate trading window provided by stock exchanges.

Under the revised framework, stock exchanges may set their trading hours between 8:45 AM and 5:00 PM, with specific windows dedicated to block deals.

Revised Block Deal Windows

To facilitate smooth execution and fair pricing, SEBI has defined two distinct block deal windows

Morning Block Deal Window

Timing: 8:45 AM to 9:00 AM
Reference Price: The previous day’s closing price of the stock.

Afternoon Block Deal Window

Timing: 2:05 PM to 2:20 PM
Reference Price: The Volume Weighted Average Price (VWAP) of the stock between 1:00 PM and 2:00 PM in the cash segment.
Between 2:00 PM and 2:05 PM, stock exchanges will calculate and disseminate the VWAP for use during the afternoon block deal window.

Price Range and Order Size

To ensure market stability and prevent price manipulation, SEBI has introduced clear guidelines for order pricing and size

Price Range: Orders must be placed within ±3% of the applicable reference price in each respective window.
Order Size: The minimum order size for a block deal has been set at ₹25 crores.
Delivery Requirement: Every trade executed in the block deal window must result in actual delivery. Squaring off or reversing the trade is not permitted.

Transparency and Disclosure

In a move toward greater transparency, stock exchanges are required to disseminate details of block deals to the public after market hours on the same day. The disclosed information will include

Name of the scrip
Name of the client
Quantity of shares bought or sold
Traded price and other relevant details

This measure aims to ensure better visibility into large trades and enhance investor confidence.

Integration with Optional T+0 Settlement Cycle

The revised block deal provisions will also apply to the optional T+0 settlement cycle. This step provides participants with greater flexibility and faster settlement options for large trades.

Implementation and Applicability

The circular mandates that all Stock Exchanges, Clearing Corporations, and Depositories adopt the updated framework.

• Stock Exchanges, Clearing Corporations, and Depositories must ensure proper trading and settlement practices are followed for Block Deal windows.
• All surveillance and risk containment measure applicable to the normal trading segment should also be applied.
• These measures should be fully implemented and monitored to maintain compliance and market integrity.

The revised framework will come into effect 60 days from the issuance of the circular.

Regulatory Basis

This circular has been issued under the powers granted to SEBI by

Section 11(1) of the SEBI Act, 1992,
Regulation 51 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, and
Section 26(3) of the Depositories Act, 1996 read with Regulation 97 of the SEBI (Depositories and Participants) Regulations, 2018.

These provisions empower SEBI to protect investor interests, promote market development, and ensure effective regulation of the securities market.

Conclusion

SEBI’s revised Block Deal Framework marks a significant step toward making large trade transactions more transparent, efficient, and fair. By introducing clear timelines, defined price ranges, and faster settlement options, SEBI aims to create a smoother and more reliable trading experience for investors. These changes reflect SEBI’s continued commitment to strengthening market integrity and protecting investor interests.

For detailed information, the circular is available on SEBI’s official website under the “Legal Framework – Circulars” section.