Relax restrictive block deal rules, FPIs urge SEBI

DSIJ Intelligence / 19 Apr 2017

Relax restrictive block deal rules, FPIs urge SEBI

The foreign portfolio investors (FPIs) are seeking an extension of time window for block deals and relaxation of order limit by writing to SEBI with the assistance of ASIFMA (Asia Securities Industry & Financial Markets Association), a body representing FPIs, according to a report on national news portal.

The foreign portfolio investors (FPIs) are seeking an extension of time window for block deals and relaxation of order limit by writing to SEBI with the assistance of ASIFMA (Asia Securities Industry & Financial Markets Association), a body representing FPIs, according to a report on national news portal.

More often FPIs, venture capitalists, mutual funds, financial institutions and insurance companies trade in block deals. Block trades are an important tool for institutions to control impact costs. If block trades are restricted, market stress, information leakage and volatility would increase, which would discourage FPIs from trading in India and ultimately affect the development of India’s capital market in an adverse manner, said a market analyst.

Block deal is a trade with a minimum quantity of 5 lakh shares or minimum value of Rs 5 crore, executed through a single transaction, on the special block deal window. The window is open for only 35 minutes in the morning trading hours.

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