Page 18 - Banking Finance November 2025

MUTUAL FUND

SEBI revises block deal

norms; raises minimum
size to Rs. 25 crore

The Securities and Exchange Board of
India (SEBI) has raised the minimum
block deal size from Rs. 10 crore to Rs. Ò»©­
25 crore and widened the permissible
price band for execution. Block deals,
which allow large trades outside the
normal market to reduce volatility, are
executed through a special trading
window on stock exchanges.
Under the new framework, there will
be two trading windows - from 8:45 to Mutual funds barred from participating in pre-IPO
9:00 a.m. and from 2:05 to 2:20 p.m. share placements: SEBI
The morning session will use the previ-
The Securities and Exchange Board of India (SEBI) has barred mutual funds
ous day's closing price as the refer-
from investing in pre-initial public offering (IPO) share placements. In a let-
ence, while the afternoon session will ter to the Association of Mutual Funds in India (AMFI), SEBI clarified that
use the volume-weighted average
asset managers may invest only in the anchor investor portion or the public
price (VWAP) between 1:45 p.m. and
issue of IPOs.
2:00 p.m. Orders must fall within ±3%
Citing Clause 11 of the Seventh Schedule of the SEBI (Mutual Funds) Regu-
of the reference price to ensure fair
lations, 1996, the regulator said all mutual fund investments in equity and
price discovery.
equity-related instruments must be made in securities that are listed or "to
All block deal trades must result in
be listed." Pre-IPO placements, however, pose risks if an IPO is delayed or
delivery and cannot be squared off. The cancelled, leaving funds with unlisted shares.
revised norms will come into effect 60
SEBI directed AMFI to immediately communicate the rule to all asset man-
days from the date of the circular's is-
agement companies and ensure compliance. The clarification follows mul-
suance, SEBI said.
tiple queries from fund houses seeking confirmation on whether they could
SEBI simplifies process for participate in such placements.
transferring securities to
47(iii) of the Income Tax Act, 1961. regulator clarified that nominees act
legal heirs While nominees could claim refunds only as trustees and must transfer se-

Markets regulator SEBI has eased the later, the process caused inconve- curities to legal heirs as per succession
process of transferring securities from nience. The new "TLH" code, devel- laws.
nominees to legal heirs by introducing oped in consultation with the Central
a standard reporting code, "TLH" Board of Direct Taxes (CBDT), will en- Tata Mutual Fund resumes
(Transmission to Legal Heirs). The sure accurate reporting and prevent
move, effective January 1, 2026, aims wrongful taxation. investments in Silver ETF
to eliminate confusion around capital "All reporting entities, including RTAs, Fund-of-Fund
gains tax applicability. listed companies, depositories, and Tata Mutual Fund has resumed fresh
Currently, such transmissions are some- depository participants, shall use the investments in its Silver Exchange
times treated as taxable transfers, 'TLH' code when reporting transmis- Traded Fund (ETF) Fund-of-Fund (FoF)
despite being exempt under Section sions to CBDT," SEBI said. Earlier, the after temporarily halting subscriptions

16 | 2025 | NOVEMBER | BANKING FINANCE