The Securities and Exchange Board of India has taken swift regulatory action against two entities over alleged manipulation of the Sensex during the newly introduced Closing Auction Session.
SEBI has barred Copthall Mauritius Investment Limited and Mansi Share and Stock Broking Private Limited from accessing the securities market in connection with alleged trading irregularities during the Closing Auction Session conducted on August 13, 2026. The regulator has also ordered the impounding of approximately Rs 3.67 crore in alleged wrongful gains from the two entities.
The action relates to trading activity during the Sensex weekly derivatives expiry on August 13. According to SEBI’s preliminary findings, large buy and sell orders placed during the closing auction influenced the indicative equilibrium price of the Sensex and were allegedly connected to positions held in derivatives that benefited from the resulting price movement.
SEBI has described its findings as preliminary, and a detailed investigation is continuing. Therefore, the allegations should not be treated as final findings of wrongdoing until the regulatory process is completed.
The two entities allegedly followed different trading strategies. SEBI said Copthall placed aggressive buy orders in Sensex constituent stocks, while Mansi allegedly placed substantial sell orders. The regulator believes these activities affected the index’s indicative closing price during the auction session.
The regulator has estimated alleged wrongful gains of about Rs 2.96 crore in the case of Copthall Mauritius Investment and approximately Rs 71.64 lakh in the case of Mansi Share and Stock Broking. The combined amount is around Rs 3.67 crore.
Copthall Mauritius Investment is linked to JPMorgan Chase. Reuters reported that public records identify the company as being owned by JPMorgan, while no evidence had been established that the two entities acted in collusion.
The case has attracted attention because the Closing Auction Session is a recently introduced mechanism in India's equity markets. The system was implemented from August 3, 2026, in a phased manner for securities in the cash segment that have derivative contracts.
Under the new system, the closing price is discovered through a dedicated auction rather than relying solely on the volume weighted average price of trades during the final 30 minutes of continuous trading. The Closing Auction Session operates as a separate 20 minute session from 3:15 pm to 3:35 pm.
The purpose of the new mechanism is to improve price discovery and bring India's market structure closer to practices followed by several major international exchanges. SEBI has previously said the system is intended to provide fair, equal and transparent access to investors.
However, concerns have emerged over the possibility that large orders placed during a relatively short auction period could influence closing prices, particularly in circumstances involving derivatives positions. The latest enforcement action demonstrates that SEBI is closely monitoring trading activity under the new mechanism.
SEBI Chairman Tuhin Kanta Pandey had previously warned that the regulator would take strict action against market participants attempting to manipulate the Closing Auction Session. He also said the new mechanism could help the regulator detect manipulative activity more quickly.
The regulator has now prohibited both entities from participating in the Closing Auction Session in the equity segment until further orders. The restriction covers placing, modifying or cancelling orders during the session. In the case of Mansi Share and Stock Broking, the restriction applies to its proprietary trading account.
SEBI’s action is significant because it represents one of the first major enforcement responses involving the newly implemented closing auction framework. It signals that the regulator intends to monitor the mechanism closely from its early stages.
The development could also influence how large institutional and proprietary traders approach the new auction system. Market participants are likely to pay closer attention to order sizes, cancellations and the relationship between cash market positions and derivatives exposure.
For ordinary investors, the case underlines the importance of maintaining confidence in the process used to determine official closing prices. The closing price can influence portfolio valuations, derivatives settlements and other market-linked calculations.
SEBI’s investigation is expected to examine the trading activity in greater detail before final conclusions are reached. The regulator has stressed that the preliminary findings in its interim order should not influence the outcome of the detailed examination.
The case therefore represents an important test for the new Closing Auction Session. While SEBI remains committed to the mechanism, the regulator’s swift response shows that it will take action if it finds evidence of attempts to distort market prices.
For the Indian stock market, the immediate priority will be maintaining transparency, fair price discovery and investor confidence as the new system becomes more widely used.