SEBI has banned Copthall Mauritius Investment and Mansi Share and Stock Broking for allegedly manipulating the newly introduced Closing Auction Session. The regulator has ordered the entities to pay back approximately ₹3.68 crore in wrongful gains after they reportedly influenced Sensex closing prices to profit from their options positions.
The Securities and Exchange Board of India (SEBI) has issued an interim order banning Copthall Mauritius Investment and Mansi Share and Stock Broking from the securities market. This action comes after the regulator found evidence that these firms allegedly manipulated the newly introduced Closing Auction Session (CAS) to profit from their derivative positions.
The CAS mechanism, which was implemented on August 3, 2026, is a trading window designed to determine closing prices for F&O-eligible stocks more transparently, replacing the older volume-weighted average price (VWAP) method. However, SEBI’s investigation into trading activity on August 13, 2026—a weekly Sensex expiry day—revealed that certain market participants may have attempted to game this system for unfair gains.
According to the regulator, the two entities used contrasting strategies to influence the index’s closing price. SEBI noted that Copthall Mauritius Investment allegedly placed large, aggressive buy orders in various Sensex stocks, which were later cancelled. These orders accounted for a significant portion of the buy-side activity during the auction, artificially pushing the index higher. By creating a higher closing price, the firm reportedly benefited from its existing long call and short put positions in Sensex options.
Mansi Share and Stock Broking allegedly took the opposite approach, placing massive sell orders in Sensex constituents at prices far below market levels. These orders were kept active for several minutes to exert downward pressure on the index before being cancelled just before the market closed. This activity appears to have been designed to lower the index level to help the firm exit its own put option positions at a profit. SEBI’s investigation concluded that while the two entities did not collude, both aimed to manipulate the index for financial gain.
Following these findings, the regulator has ordered the disgorgement of wrongful gains amounting to ₹2.96 crore from Copthall Mauritius Investment and ₹71.65 lakh from Mansi Share and Stock Broking. This move highlights SEBI's focus on maintaining market integrity, especially during the early adoption phase of new trading mechanisms. The regulator has made it clear that it will continue to monitor the CAS window closely to prevent similar misuse and ensure that price discovery remains fair for all investors.
For market participants, this enforcement serves as a signal that the regulator is utilizing advanced surveillance tools to monitor the new auction system. The primary monitorable for investors going forward will be any further regulatory updates or guidelines that may adjust how orders are managed during the closing auction to reduce volatility.