A single transaction or set of transactions in which the total traded quantity bought/sold under any single client code is more than 0.5% of the number of equity shares of a listed company. Stock brokers need to disclose all the bulk deals information to the exchange on a daily basis through DUS (Data Upload Software).
If the bulk deal happens through a single trade, it should be notified to the exchange immediately upon the execution of the order. If it happens through multiple trades, it should be notified to the exchange within one hour from the closure of the trading.
The definition of block deals provided by the Securities and Exchange Board of India (SEBI) is as follows:
A trade, with a minimum quantity of five lakh shares or a minimum value of Rs 5 crore, executed through a single transaction through a separate window of the stock exchange constitutes a block deal. Stock brokers are required to make a disclosure on a daily basis through DUS (Data Upload Software) regarding Block deals.
SEBI came out with guidelines pertaining to block deals in September 2005.
* A separate trading window would be kept open for a limited period of 35 minutes from the beginning of trading hours: 9.55 am to 10.30 am
* Orders should be placed at a price not exceeding +1% or -1% from the ruling market price or previous day’s closing
* An order should be for a minimum quantity of five lakh shares or minimum value of Rs 5 crore
* Every trade executed must result in delivery and shall not be squared off or reversed.
* Stock exchanges should disseminate the information on block deals to the general public on the same day after market hours. This should contain information bits like name of the scrip, name of the client, quantity of shares, traded price and so on.