Sebi bars two entities from markets over manipulation in CAS, orders ₹3.68 crore disgorgement

The Securities and Exchange Board of India (Sebi) has barred Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Pvt Ltd from accessing the securities market and ordered them to deposit a combined ₹3.68 crore over alleged manipulative trading during a Sensex closing auction session (CAS).

Bloomberg reported that Copthall Mauritius Investment is a unit of JPMorgan Chase & Co.

The proceedings mark the first time Sebi has taken formal action against an entity for trading in the auction session.

In an ex-parte interim order issued on Wednesday, the market regulator said that the two entities had manipulated the closing auction session on 13 August, which was a weekly Sensex expiry day for derivatives contracts on the bourse. Copthall has allegedly made an illegal gain of ₹2.96 crore while Mansi Share made unlawful profits of ₹71.65 lakh.

CAS made its debut in the Indian securities markets on 3 August. Under the system, buy and sell orders are pooled during a dedicated end-of-day window and matched at an equilibrium price that allows the maximum volume of shares to trade. The mechanism is aimed at improving price discovery and bringing India's market closer to practices followed in other major markets.

According to the order, on the weekly Sensex expiry day of 13 August, the regulator spotted three sharp spikes in the indicative equilibrium price. The Sensex jumped 362 points in two seconds, 132.67 points in 12 seconds and another 405.08 points in 28 seconds.

Inside the trades

The order logs showed that Copthall was behind most of the aggressive buying. During the first spike, it accounted for 99.91% of the ₹66.64 crore buy-order value, placing orders across all Sensex constituents at prices around 3% above their reference prices.

It repeated the strategy during the later spikes, accounting for 96.09% and 85.21% of buy-order value, respectively. It subsequently cancelled ₹98.12 crore of buy orders across 30 stocks.

Mansi took the opposite approach. It placed 12.65 lakh shares worth ₹143.44 crore in sell orders across eight Sensex stocks at prices below reference levels, then cancelled the entire block within four seconds. Sebi said the orders appeared intended to suppress the index, with their cancellation triggering a 232.96-point surge in the IEP.

“This also shows that the sell orders for 5 minutes were prima facie meant to suppress the IEP rather than performing a legitimate sell transaction. One economic rationale for such trading could prima facie be that the F&O position of the entity provided an economic incentive for engineering such movements in SENSEX IEP until their sell orders remained in the system,” the order said.

“The need for immediate and urgent directions is further strengthened by the fact that Noticees are found to have created outstanding positions in the coming weekly Sensex options on August 20, 2026. In such circumstances, allowing Noticees to continue participating in the CAS, ...may expose the securities markets to the risk of recurrence of blatant misconduct observed in the present case,” Sebi added.

The copy was updated to reflect that Copthall Mauritius Investment is a unit of JPMorgan Chase & Co.