Should Names Be Disclosed in Block Deals? Clash Between Mutual Funds and SEBI Intensifies
āš» Written by Dr. Vinay Prakash Tiwari
Founder of LTP Calculator Financial Technology Private Limited
A fresh debate has emerged in the stock market over block deals — large transactions of shares executed at pre-agreed prices. Mutual funds are urging SEBI to stop disclosing the names of the buyers and sellers involved in such deals. They argue that public disclosure creates unnecessary volatility and often disrupts the execution of the entire deal.
š¬ What Are Mutual Funds Saying?
In a meeting with SEBI’s working group, mutual fund representatives suggested that if an investor’s stake in a company is less than 0.5% of total equity, their name should not be disclosed in block deal data.
One fund manager stated, “As soon as a big trader’s name becomes public, others in the market start following the trend. This impacts the price and demand of the stock, and many times the strategy gets derailed.”
They also highlighted that mutual funds usually operate with long-term strategies and make such trades at the scheme level, which rarely influence the company’s control or decisions. Despite that, they are required to make full disclosures — which adds to the compliance burden without offering any meaningful benefit.
š¢ But Not Everyone Agrees
Institutions like the BSE Brokers Forum (BBF) strongly opposed this proposal. BBF argued that block deal windows offer special privileges — such as negotiated pricing and minimal market impact — and therefore require higher transparency.
A BBF representative said, “If someone is uncomfortable with their name being disclosed, they are free to trade in the normal market instead of using the block window.”
š§ Other Suggestions Presented to SEBI
- SEBI’s working group has also proposed a few changes to strengthen the block deal framework:
- Widening the Price Band — 5% for the morning window and 3% for the afternoon window
- Raising the Minimum Deal Size — from ā¹10 crore to ā¹25 crore
- Unifying the Reference Price Mechanism — to ensure consistency across both trading windows
The intention behind these changes is to ensure that only serious institutional investors use the block deal window, not high-net-worth individuals or family offices trying to bypass the regular market.
š The Bottom Line
SEBI is still reviewing the entire proposal. While mutual funds are pushing for confidentiality, other market participants are advocating for transparency. SEBI’s final decision will determine whether India’s stock market becomes more open and trust-driven, or whether strategic confidentiality will be given priority to institutional investors.
Written by : Dr. Vinay Prakash Tiwari
Founder, LTP Calculator Financial Technology Private Limited
