In what is being referred to as the Jane Street effect, markets regulator Securities and Exchange Board of India (SEBI) has proposed raising the minimum order size for execution of trades in the block deal windows to ₹25 crore.
A block deal is a large trade of shares that takes place between a buyer and a seller through a single transaction on the stock exchange and can only be executed during a special 15-minute window provided by stock exchanges twice a day. The current minimum order size of ₹10 crore has been in place since 2017.
“The minimum order size for execution of trades in the block deal windows shall be ₹25 crore. Every trade executed in the block deal windows must result in delivery and shall not be squared off or reversed,” SEBI said in its consultation paper.
Additionally, the markets regulator has also proposed to review the pricing mechanism for such trades and is contemplating widening the price band to up to 3 per cent for non-derivative stocks, while retaining the existing 1 per cent band for futures and options (F&O) scrips.
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Currently, trades can only be executed within a 1 per cent band on either side of the previous day's closing price.
The consultation paper further details the operating hours of the block deal windows. The morning session will run between 8:45 am and 9 am, with trades executed at the previous day's closing price. The afternoon session, from 2:05 pm to 2:20 pm, will use the volume weighted average market price (VWAP) of trades executed in the cash segment between 1:30 pm and 2 pm as the reference price.
These windows are designed to provide buyers and sellers a platform to execute large share transactions that are usually negotiated in advance.
To enhance transparency, Sebi said stock exchanges would disseminate details such as the name of the scrip, client name, quantity of shares, and the traded price to the public on the same day after market hours.
The Securities and Exchange Board of India (Sebi) has sought public comments till September 15 on the proposals.
To encourage greater participation of women in mutual funds, Sebi is also planning to introduce additional incentives for investments by first-time female investors, especially in B30 or tier 2 and 3 cities, its chief Tuhin Kanta Pandey said on Friday.
“Financial inclusion will remain incomplete unless women are equally represented. We are thus also envisaging to introduce an additional distribution incentive for investments from first-time women investors,” he said at an event organised by the Association of Mutual Funds in India (Amfi).
The move will not only bring new participants into the fold but also extend the reach of mutual funds into underrepresented regions, contributing to deeper financial inclusion.
To facilitate the industry to become more “transparent and investor-friendly”, Sebi chairman said they are reviewing categorisation of mutual fund schemes and have decided to discontinue the requirement of filing over 52 reports, notices and addendums by the asset management companies (AMCs).
In other news, Sebi announced that it got on board three executive directors – Amit Pradhan, Avneesh Pandey and Sanjay Chandrakant Purao.
Before their promotions as executive directors, Pradhan, Pandey and Purao were holding the positions of chief general managers at Sebi.
In his new role, Pradhan will handle legal affairs and the prosecution and settlement department, while Pandey will manage the information technology department. Purao will take care of the corporation finance investigation department, recovery and refund, along with the internal investigation department, the regulator said in three separate statements.
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