India has lifted a trading ban imposed on Copthall Mauritius Investment Ltd., a unit of JPMorgan Chase & Co., and Mansi Share and Stock Broking after both companies deposited ₹3.68 crore in alleged wrongful gains in the closing auction session manipulation case. According to The Economic Times, the deposit was made within a day of the markets regulator directing the alleged illegal gains to be impounded in its August 19 ex-parte interim order. The entities can now trade again while the investigation continues, with the regulator planning to release a confirmatory order after studying formal responses and giving each an in-person hearing. However, as reported by The Economic Times, the ban on participation in the Closing Auction Session (CAS) remains in effect.
The market regulator had ordered both Copthall and Mansi to handover the gains after its investigation found that they executed manipulative trades during the end-of-day auction to influence the indicative equilibrium price of the BSE Sensex Index, benefiting their options positions on the benchmark. As reported by Moneycontrol, SEBI detected three sharp movements in the Sensex's indicative equilibrium price during the August 13 auction: the first saw the index jump 362.02 points in just two seconds, while two subsequent spikes involved movements of 132.67 points and 405.08 points. According to SEBI's prima facie findings, Copthall placed aggressive buy orders across Sensex constituents, while Mansi placed large sell orders that were subsequently cancelled. The regulator estimated wrongful gains of ₹2.96 crore for Copthall and ₹71.65 lakh for Mansi.
While the broader market-access restrictions have been lifted, both entities continue to remain barred from participating in the equity segment's Closing Auction Session (CAS) until further orders. As reported by The Economic Times, SEBI provided both companies 21 days to reply to its accusations and is now planning to release a confirmatory order after studying formal responses. The regulator's investigation into the alleged market manipulation will continue, with the regulator noting that allowing them to continue participating in the CAS could have exposed the market to a recurrence of the conduct under examination. The CAS framework came into effect on August 3, with normal trading ending at 3:15 pm, followed by a reference-price period and the auction.
Copthall is registered in Mauritius with a history of investment activity in India, once holding Indian stocks worth more than ₹55 billion rupees, according to data platform Trendlyne.com. As reported by The Economic Times, those holdings have shrunk to less than ₹380 million rupees as of June 30. The company is separate from J.P. Morgan India Pvt., which is registered with SEBI as a stock broker and merchant banker, with the order against the Mauritian entity not directly impacting JPMorgan's activities in India conducted through its local unit. Representatives for JPMorgan and Mansi Share didn't respond to requests for comment, while a spokesperson for the Indian regulator did not immediately respond to requests for comment.
