Framework of New Block Deal was announced by the Securities and Exchange Board of India (SEBI) on October 8, 2025 to help bring significant changes to how large trades are conducted in India. These modifications, as stipulated by circular SEBI/ HO/MRD POD-III/CIR/P/2025/134, will enable ease, clarity and safety of all the parties involved with big transactions [1].
What Are Block Deals?
We shall first have to know what block deals are before plunging into the changes. A block deal refers to an instance when one buys or sells a block of shares at a single customer. Imagine that it is a purchase on a wholesale level rather than at retail. The hypotheses that occur between these trades are typically between large institutional investors, major corporations or other rich individuals who wish to transfer large amounts of shares without distorting the normal market price [1].
The beauty of the block deals is that it enables large deal to take place easily. In the absence of special system to such trades, making such massive order in the normal market would lead to the prices bestowing themselves about like the weather and this will not favor the buyer or the seller.
What was the Rationale behind SEBI Reviewing the Framework?
SEBI did not effect these changes so randomly. The regulator started with a cautious procedure that involved a reference to a Working Group, liaison, with the Secondary Market Advisory Committee, and consultation among the populace [1]. This demonstrates that SEBI was listening to the market players and knowing what they wanted to be better.
The primary objectives of such a review are threefold, namely, a more transparent world, wherein each knows what is occurring, enhanced efficiency whereby trades occur seamlessly, and high oversight to deter any malpractice. These purposes go hand in hand with the constitutional mandate of SEBI that it is designed to protect investors and give fair markets.
The New Trading Windows
The biggest transformation is in the ability and location of occurrence of block deals. The trades are developed into two time windows by SEBI [1].
The morning window is between 8.45 and 9.00 AM. At this period, block trades are earmarked using the closing price on the day before. This is understandable since the regular market is yet to open, and the price at the close of yesterday is the latest price that can be treated as fair.
Afternoon window is between 2:05 PM and 2:20 PM. This window incorporates a more advanced reference price which is the Volume Eaten Price or VWAP. The calculation of the VWAP involves those trades which occurred in the regular cash market between 1:00 PM to 2:00 PM [1]. This is computed by the stock exchanges between 2:00 PM and 2:05 PM and is communicated to all persons with a period of five minutes before an afternoon block deal period opens.
This is a two-window system that offers market flexibility. They are free to trade the morning window in case they wish to trade early according to the price movement of the previous day or wait until the afternoon window when they want to trade according to the reference price which is in respect to the trading activity of the day.
Price Limits and Order Sizes
SEBI has established strict regulations regarding price and order volumes to avoid manipulated markets and have made them fair. The price of all the block deal orders should be submitted within the range of plus or minus three percent of the reference price [1]. The tightness of this band keeps the prices affordable and within the market range.
Minimum size of the order is arrived at twenty five crores of rupees [1]. Such a high threshold will maintain the use of block deal window to only the truly large trades. The smaller trades should use the usual market which is better equipped to transact in it.
There is also a need that any block deal should lead to actual delivery of shares. It is impossible to buy and sell to turn the tables. The delivery requirement helps in making sure that block deals are real deal and not a speculative game [1].
Disclosure -Transparency
The new transparency requirement is among the most notable ones. At the end of every day, stock exchanges are required to release comprehensive information concerning every block deal, which took place [1]. This data consists of the description of the stock being bought and sold, the name of the client who was involved in the trade, the quantity of shares bought or sold, and the price it sold or had been sold to.
This requirement of disclosure is a great triumph to transparency in the market. This has allowed investors and other analysts to now view the large movers in the market. Such exposure will assist in creating confidence and avoiding some manipulations. The market will become fairer and democratic when all people are aware of the activities of the large players.
T+0 Settlement with integration
The T +0 settlement cycle is also the new block deal [1]. T +0 is simply that you can clear your trade on the same day rather than leaving it to one or two days. This quicker settlement allows participants greater flexibility of choice and saves them time their money will remain in the transit.
In the case of a block deal, a T +0 option is especially handy. When dealing with large investments, there is often a situation where a large investor has to shift money rather rapidly between investments. Their operations become very efficient by the means of being able to complete a block deal and get settled on the same day
Adoption and Implementation
SEBI has stressed the fact that these new rules should be observed by all the stock exchanges, clearing corporations, as well as depositories [1]. These organizations have to be able to maintain adequate trading and settlement procedures of block transactions. More to the point, the entire surveillance and risk management exercises which are applicable to ordinary trading would also have to be applied to block deals.
This implies that block deals cannot be treated as an isolated less-monitored environment by exchanges. Block deals will be watched by the same watchful eyes which watch trading of the regular kind. Such an oversight plays a significant role in ensuring market integrity and detection of any suspicious activity.
The new framework shall be in effect sixty days after October 8, 2025, which allows market participants two months to prepare and adjust their systems [1].
Legal Authorization of these Changes
SEBI made this circular in accordance with its legal authority vested by a number of significant laws [1]. SEBI has the discretion to safeguard investors and market securities in order to safeguard people and establish a securities market, aided by section 11(1) of the SEBI Act, 1992. The securities contracts regulations regulation 51 of 2018 gives special powers on stock exchanges and clearing corporations. SEBI has authority on the holding and transfer of securities under the Depositories Act, 1996 and other rules.
These legal grounds demonstrate that SEBI is not going beyond its boundaries. The regulator is applying its duly established powers to execute its constitutional and legislative functions of safeguarding the investors and fair and efficient markets.
Why These Changes Matter
Such shifts are somewhat of a detente between numerous competing interests. Big investors require means of trading big portions of shares without interfering with the market. Frequent shareholders require the certainty and shield against fraudulent activities. The entire market requires a strong management that ensures that trust and integrity reign.
All these needs are met by the new block deal framework. The rules offer big investors the assurance that they require by ensuring that they have a definite time period. The rules safeguard the ordinary investors as it demands them to disclose, which helps build transparency. The rules ensure integrity in the market by enforcing a surveillance and delivery requirement.
Larger Constitutional Background
The reform of the framework of block deals done by SEBI indicates the values that are included in the Preamble of Indian Constitution. The transparency aspect will encourage fairness as everyone will get access to information. The necessity to balance between the efficiency and the oversight provides an image of the principle of liberty within reasonable limitations. The safeguarding of small and large investors is the embodiment of the ideal equality. And the general fortification of market systems helps in the fraternity of trust the markets are required to perform.
Proper regulation of securities is not merely a matter of technical regulations. It is of designing systems that are beneficent of bigger general interest and constitutional principles. Under efficient markets, the capital moves to more productive purposes, corporations have the ability to raise funds to expand and common individuals can save and invest without fear. This is all in the development of the economy and social good.
Conclusion
The updated Block Deal Framework provided by SEBI is one of the most considerate changes which contributes to the transparency, efficiency and fair play of the large stock trade. SEBI has made this better by forming a system that suits all through the introduction of clear trading windows, defined range of prices, mandatory disclosure as well as integration with faster settlement cycles.
These reforms will be effective in December 2025 when all the market participants will have enough time to prepare. Large trades can be expected to be published with the system and will have a much-regulated environment rolled out to the investors. This will be another move towards achieving the goal of having global financial markets that will take the interests of the entire constituents in the country whilst upholding the utmost ethical principles.
References and Further Reading
[1] ICICI Direct Research Report: “SEBI Reviews the Block Deal Framework: Key Highlights and Implications,” October 10, 2025. Available at: https://www.icicidirect.com/research/equity/finace
[2] SEBI Official Website – Legal Framework and Circulars
[3] SEBI Act, 1992
[4] Securities Contracts (Regulation) Act and Regulations
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Author: Adv. Aaditya Bhatt | Advocate, Gujarat High Court | Email: aaditya.bhatt@
