Indices● Neutral
SEBI bars two entities for alleged Sensex closing auction manipulation
SEBI bars Copthall Mauritius and Mansi Share and Stock Broking after finding they manipulated the Sensex closing auction for options profits on August 13.
Continue with
The Securities and Exchange Board of India (SEBI) has barred Copthall Mauritius Investment and Mansi Share and Stock Broking from the securities market after finding what it called “prima facie” evidence of manipulation in the Sensex closing auction on August 13.
The regulator said Copthall must disgorge ₹2.96 crore and Mansi ₹71.65 lakh. Their bank accounts have been frozen for debits.
The closing auction session (CAS), introduced on August 3, runs from 3:15 pm to 3:35 pm and determines closing prices by matching buy and sell orders. During the August 13 session, the Sensex swung 362.02 points in two seconds, then 132.67 points in 12 seconds, and another 405.08 points in 28 seconds – all within five minutes.
Copthall, SEBI found, was buying across Sensex constituents at prices near the upper permissible limit. It accounted for 99.91% of the relevant buy-order value during the first spike, 96.09% during the second, and 85.21% during the third. After the third spike, it cancelled buy orders worth roughly ₹98.12 crore across 30 stocks.
The trades lined up with Copthall’s derivatives positions. SEBI said the entity held substantial long call and short put positions in expiring Sensex options. A higher settlement value improved the profitability of those positions and reduced obligations on the sold puts.
“It is prima facie established that such aggressive buy orders by Copthall had caused a sustained upward move in IEP of Sensex constituents and ultimately resulted in Sensex closing at 78080, whereas, equivalent move based on Nifty movement would have resulted in Sensex closing at 77840,” WTM Kamlesh Varshney said in an ex-parte interim order on Wednesday.
Mansi Share and Stock Broking used the opposite play. SEBI’s analysis shows the broker’s proprietary account placed large sell orders worth more than ₹145.65 crore across several Sensex stocks at prices well below prevailing reference levels. The orders stayed in the system for nearly five minutes, pushing the index lower. Moments before the close, the orders were cancelled, triggering an immediate 232.96-point rebound in the Sensex.