MUMBAI, JAN 13: The Securities & Exchange Board of India (SEBI) has decided to do away with the facility of `all or none' on the Bombay Stock Exchange and the `minimum fill' order on the National Stock Exchange (put simply, these are systems to regularise unofficial kerb deals) in a bid to improve transparency and bring down volatility in the stock markets.The SEBI ban on such deals is likely to affect kerb deals (done outside the stock exchanges). The regulator has, however, not yet decided the date from when the ban would take effect at the exchanges. "SEBI would be shortly issuing a circular to the stock exchanges to give effect to the said changes in the system. The changes will be effective from the date as mentioned in the circular," stated a SEBI release issued here on Wednesday.`All or none' trade is a field specifically available on the BOLT of the BSE, where trades can get matched at a pre-determined price and quantity. The field was introduced by the BSE way back in 1997 to regularise kerb trades. Similarly, the `minimum fill' field available on the National Stock Exchange's trading platform also offers a facility to route kerb deals, where a minimum deal has to be matched at particular price."Currently, in excess of 50 per cent of the total market delivery at some exchanges is in the dematerialised form and the increase in the list of scrips for compulsory demat trading has reduced the need for such practices," stated the SEBI release. The move was mooted in the light of discussions with various market participants like brokers, FIIs and exchange representatives. "It would now be a case of kerb deals being routed through the market with delivery in hand," said a senior SEBI official, while pointing to the way in which kerb dealers would route the unofficial deals.SEBI has also worked on certain modalities wherein the negotiated deals could also be brought into the ambit of the regular price bands. The price bands applicable to normal trades will now become applicable to negotiated trades, including cross deals, bulk deals and all trades where the price is not determined on the exchange's trading system. As of date, the applicable price band is 8 per cent from the previous day's close for the normal market on an exchange.According to SEBI norms, a negotiated deal has been defined as any transaction executed at a price not formed through the stock exchange price and order matching mechanism. "All the regulations relating to the price bands for the securities in normal market will also apply to the negotiated trades," the SEBI release further clarified.SEBI has also decided to implement a measure wherein the delivery and payment for all `hand delivery' trades, including trade-for-trade which is available on the NSE, negotiated trades, cross deals and bulk deals, will have to be completed within the time or on the date of entering the deal. The stipulated time of settlement of the deal is 7 days, following the date of contract.
