This, however, did not happen and negotiated deals are on an upswing once again. While the regulator has tried hard to rid the system of the unofficial market, the policies framed by Sebi to regulate negotiated deals has a loophole which enables market operators to go ahead with kerb deals. Sebi's policies on negotiated deals announced on July 17 state: "Any transactions after the trading hours of the exchange would be reported immediately onthe next trading day at the start of the market hours". This, according to market participants, has enabled the kerb operators to route their deals through the official channels, if the movement of the 30-share BSE Index is any indication.

The beginning of the settlement cycle on July 20 has witnessed an erratic movement in the Sensex during the first half hour of the session. On July 20, the index opened at 3,471.45 points at 10 am, fell to a low of 3,458.83 points at 10.10 am and recovered to 3,454.38 points at 10.15 am before stabilising at 3,441.15 points at 10.30 am.

Similarly on July 24, the last day of the trading cycle, the index opened with a gap of over 8 points, fell to a low of 3,198.48 points, continued its downward journey on account of huge sales to fall to a low of 3,174.64 points only to recover by 10.24 to stabilise at 3,204.32 levels.

Interestingly, the settlement ended July 17 saw the negotiated deals fall considerably on the Bombay Stock Exchange. The negotiated deals fell from ahigh of Rs 4.35 crore registered in the settlement ended June 26 to a low of Rs 2.08 crore during the settlement ended July 17. According to sources, on July 17, kerb operators refrained from making any commitments till 7 pm, till Sebi's policies on negotiated deals were announced. However, once it was clear that the policies had enough scope to allow trades official trading hours, operators were back in action on Dalal Street.