Definition of Bulk Deal:
A bulk deal is said to have happened if under a single client code and in a single or multiple transactions more than 0.5 per cent of a company’s equity shares are traded. A bulk deal can be implemented within the trading hours at any point of time.
Description of Bulk Deal:
Bulk deal order consists of the following attributes:
The order should comprise of buying/selling of at least 0.5% of the total number of equity shares of a company, listed in a particular ‘scrip‘ or exchange.
The broker who manages and implements the trade transaction is solely responsible for notifying about the bulk deals on a daily basis to the particular exchange. The broker is supposed to supply the exchange with the following details and attributes of the order:Name of the scrip, name of the client, quantity of shares bought/sold and the traded price.
If the Bulk Deal comprises of a single trade transaction: The broker has to notify exchange immediately.
If the bulk deal comprises of multiple transactions: The broker should notify the exchange within one hour from the closure of the trading.
The trade executed must result in delivery and shall not be squared off or reversed.
According to SEBI, optimal trading and settlement activities, surveillance and risk regulation measures which are applicable to common trading activities are applicable and exhibited in the trading windows also.
The exchange has to ‘disseminate‘ or share the entire information about the bulk deal in the public market after the closing of trading hours on the same day of the implementation of the bulk deal.
Usually institutional players like Mutual Funds, Asset Management Companies, Insurance Companies, Banks, and Venture Capital Companies participate in bulk deals.
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