Separate time slot for block deals

Orders can be placed only for half-an-hour in the morning.

Block deals on the Bombay Stock Exchange and the National Stock Exchange will now be traded only for half-an-hour in the morning.

"We have put in place a mechanism for block deals to be traded between 9:55 am and 10:25 am," Ravi Narain, managing director and CEO of the NSE, said while speaking at a press conference at the Hindustan Times Leadership Summit 2005 today. All single trades of at least 500,000 shares or where a deal value is at least Rs 5 crore are defined as block deals.

Both the BSE and NSE will disclose details of stocks, including information on the number of shares traded, prices, and traders involved, on the same day after market hours.

"This will increase transparency and curb unnecessary volatility," M Damodaran, chairman, Securities and Exchange Board of India (Sebi), said at the press conference.

In September, Sebi had asked the stock exchanges to implement such a system. Sebi's guidelines allow orders for block deals to be placed in this half-an-hour window at a price difference of not more than one per cent from the ruling market price, or from the previous day's closing price, as applicable. Further, every trade executed must result in delivery and not be squared off or reversed.

The new system, applicable for block deals, is in addition to Sebi's circular issued in January 2004 on disclosures of details of bulk deals. Brokers are required to disclose details of bulk deals where the trade in a scrip for a client exceeds 0.5 per cent of equity shares of a company listed on an exchange.