SEBI Ex-Parte Order Against Copthall Mauritius and Mansi Broking for Sensex Closing Auction Manipulation

Kaustav Chowdhury
13 minutes ago
4 min read

On August 19, 2026, the Securities and Exchange Board of India (SEBI) passed an ex-parte interim order against two entities, Copthall Mauritius Investment Limited (a foreign portfolio investor and unit of JPMorgan Chase & Co.) and Mansi Share and Stock Broking Private Limited, for prima facie manipulation of the Sensex closing price during the Closing Auction Session (CAS) on August 13, 2026. The regulator found that both entities had placed large, aggressive, and strategically timed orders that artificially moved the Sensex Indicative Equilibrium Price (IEP) on what was also a Sensex weekly options expiry day. SEBI has impounded a combined sum of approximately Rs 3.68 crore as estimated wrongful gains and barred both entities from the securities market until further orders.

What Is the Closing Auction Session and Why Does It Matter?

The Closing Auction Session (CAS) is a mechanism used by stock exchanges to determine the closing price of securities through a call auction process. It runs for a brief window after regular market hours and is designed to produce a fair, volume-weighted closing price. Because the closing price is used as a reference for index fund rebalancing, derivatives settlement, and NAV calculations for mutual funds, any manipulation during CAS can have significant cascading effects across the market.

August 13, 2026 was a Sensex weekly options expiry day, which means that derivatives contracts linked to the Sensex were due for settlement at the closing price. This created a direct financial incentive for anyone who could move the Sensex closing price in a particular direction, even by a small margin.

The Alleged Manipulation: A Two-Sided Strategy

SEBI's order describes a coordinated pattern of order placement across Sensex constituent stocks during the CAS window. The regulator identified three distinct price spikes (referred to as Spike 1, Spike 2, and Spike 3) during which the Sensex IEP moved sharply upward and then reversed, in a pattern that appeared designed to benefit outstanding derivatives positions.

Copthall Mauritius Investment Limited was identified as the dominant buyer during the CAS. According to SEBI's findings, Copthall accounted for 86.6 per cent of the total gross buy order value in Sensex constituent stocks during the session, placing buy orders worth Rs 191.29 crore out of a total of Rs 220.8 crore. During Spike 1, Copthall's share of buy order value was a staggering 99.91 per cent. During Spikes 2 and 3, this share was 96.09 per cent and 85.21 per cent respectively. The orders were placed at prices within the maximum permissible limit of 3 per cent above the reference price, and a substantial portion was cancelled after the IEP had moved upward.

Mansi Share and Stock Broking Private Limited operated on the sell side. After Copthall's buy orders had pushed the IEP upward, Mansi placed aggressive sell orders across eight Sensex constituent stocks at approximately 2.5 per cent below the reference price. These sell orders depressed the IEP for approximately four to five minutes before being cancelled. SEBI found that Mansi held outstanding Sensex option positions expiring on the same day and stood to benefit from the price movement its sell orders had created.

SEBI's Legal Findings

SEBI concluded that the conduct of both entities amounted to prima facie violations of Regulations 3 and 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations) and Section 12A of the SEBI Act, 1992. These provisions prohibit market manipulation, fraudulent and unfair trade practices, and the creation of a false or misleading appearance of trading in a security.

The regulator estimated prima facie wrongful gains of Rs 2.96 crore for Copthall and Rs 71.64 lakh for Mansi, bringing the total impounded amount to approximately Rs 3.68 crore. SEBI noted that these gains were directly attributable to the artificial price movement created during the CAS.

Directions Issued by SEBI

The ex-parte interim order carries several significant restrictions. SEBI has directed that the estimated wrongful gains be impounded, with both entities' bank accounts frozen against debits without prior permission from the regulator. Both Copthall and Mansi have been restrained from accessing the securities market and prohibited from participating in the equity segment's CAS, either directly or indirectly, until further orders. For Mansi, this restriction applies specifically to its proprietary trading account.

Since this is an ex-parte interim order, both entities will have an opportunity to respond before SEBI passes a final order. However, the interim restrictions remain in force until modified or revoked by the regulator.

Significance for Market Participants

This order is notable for several reasons. First, it involves a foreign portfolio investor linked to a major global financial institution (JPMorgan Chase), which underscores that SEBI is willing to act swiftly against sophisticated market participants. Second, it highlights the vulnerability of the CAS mechanism to manipulation, particularly on derivatives expiry days when the financial incentive to move closing prices is highest. Third, the speed of SEBI's response, with the order coming just six days after the alleged manipulation, suggests that the regulator's surveillance systems are becoming more effective at detecting unusual order patterns in real time.

Market participants who routinely engage in CAS trading should take note: SEBI is actively monitoring order-to-trade ratios, cancellation patterns, and the concentration of orders during CAS windows. Any pattern that suggests an intent to artificially move prices is likely to attract regulatory scrutiny.

Key Takeaways

Ex-parte interim order: SEBI passed the order on August 19, 2026, just six days after the alleged manipulation during the Sensex CAS on August 13, 2026.
Entities involved: Copthall Mauritius Investment Limited (JPMorgan entity) and Mansi Share and Stock Broking Private Limited.
Impounded amount: Approximately Rs 3.68 crore (Rs 2.96 crore from Copthall and Rs 71.64 lakh from Mansi).
Legal basis: Violations of Regulations 3 and 4 of PFUTP Regulations, 2003 and Section 12A of SEBI Act, 1992.
Restrictions: Both entities barred from the securities market and prohibited from CAS participation until further orders.
Wider implication: SEBI's swift action signals enhanced surveillance of CAS trading, particularly on derivatives expiry days.