Sebi bans hand delivery bargains on exchanges

Securities and Exchange Board of India (Sebi) has disallowed hand delivery bargains on stock exchanges barring exceptional circumstances. The capita market regulator said all transactions would be settled through clearing corporation and clearing house of the stock exchanges. Hand delivery bargains and delivery versus payments (DVP) would be allowed if there is total connectivity failure at the exchange/STP, on international holidays and closing down of national and international centres due to calamities, Sebi said. In case of rejection by an institutional trade by the custodian after the trade has been executed, the exchange would permit settlement through hand delivery bargain on a DVP basis without imposing margin, Sebi said, adding, the exchange would consider the trade as an institutional one if evidence to that effect is available. But such trades would be subject to penalties as may be imposed by the bourses, it said. In case evidence is not available, the exchange, while allowing the trade to be settled through hand delivery bargain on a DVP basis would, however, impose both margins and penalties. SEs told to open block deal window MUMBAI Sebi has asked all exchanges to provide a separate trading window for execution of block deals in which a minimum of 500000 shares are traded in a single transaction or the value of the transaction is at least Rs 50000000. The special trading window will be kept open only from 9.55 am to 10.30 am. The transaction done through this separate window will constitute a ‘block deal’. — ENS