The Hindu Business Line : BSE, NSE open separate window for block deals

Mr M. Damodaran, Chairman, SEBI, with Ms Charlotte Crosswell, Head of Nasdaq International, at a press conference in the Capital on Tuesday. - Kamal Narang

New Delhi , Nov. 15

BLOCK deals on both the National Stock Exchange and the Bombay Stock Exchange has now come under a separate window that would be available for the first 30 minutes of the trading day. The separate window for block deals has become operational from Monday.

Announcing this at a press conference here on Tuesday, Mr Ravi Narain, Managing Director of the NSE, said that this move would encourage transparency and also ensure that block deals entered between institutional parties do not in any manner disrupt the normal market.

`Comfort' for average investor: The Securities and Exchange Board of India Chairman, Mr M. Damodaran, said that the real comfort is that block deals would not take place after 10.25 a.m.. "Therefore, intra-day, at any point of time, what was happening earlier won't take place now. That's the comfort for the average investor," he said.

He added that the capital market regulator had only facilitated and driven the process for both the NSE and BSE to have a separate window for block deals.

Mr Narain explained that as long as block deals were part of the normal market, there was potential that such deals could disrupt the normal market process.

Curbing volatility: "This is because if a huge block deal comes in, it could either result in quick rise or quick fall. This was something that was contributing to the volatility in the markets. I am not saying that this (block deals) is the only reason for volatility in the stock markets," he said.

He expressed confidence that block deals would now be done in a manner that would protect the interests of the buyer and seller, and also be executed transparently without being potentially disruptive. He also said that normal trading would take place even as block deals are entered through the separate window.

Disclosure norms: As regards the disclosure norms for block deals that would come under the separate window, he said that the names of buyers and sellers would be disclosed if the deals are above the threshold limits stipulated by SEBI.

Asked whether the regulator intends to review the threshold limits for disclosure of block deals in the context of the separate window, Mr Damodaran said that no additional disclosures would be mandated.

"In fact, we have been told that in this particular matter, there is more disclosure in the Indian market than there are in other markets," he said.

On whether the NSE plans to get listed, Mr Narain said that he would be unwise to say that the exchange would never get listed. As of now, the exchange has no such plans.

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