Now Reading: Sebi crackdown on closing auction manipulation warns traders
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Sebi crackdown on closing auction manipulation warns traders
The Securities and Exchange Board of India (Sebi) has issued an interim order against Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Ltd for allegedly manipulating the closing auction session…
The Securities and Exchange Board of India (Sebi) has issued an interim order against Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Ltd for allegedly manipulating the closing auction session (CAS) on Sensex options expiry day, 13 August. The regulator said the entities traded Sensex constituents in a way that caused artificial spikes and dips, enabling wrongful gains of Rs 2.96 crore for Copthall and Rs 71.65 lakh for Mansi Share. Sebi has impounded these gains and given the entities three weeks to respond.
Market experts say the action is a strong deterrent ahead of monthly Nifty and Sensex derivatives expiries. Under CAS, orders must be within a 3% band above or below a reference price, making unusual trading easier to detect. The regulator's surveillance system spotted that Copthall bought at the upper band while Mansi Share sold at the lower band, contrary to typical buyer and seller behaviour, confirming suspicions of manipulation.
Indian Opinion Analysis
This is Sebi's first major enforcement under the CAS mechanism introduced in August, replacing the earlier volume-weighted average price system for 213 derivative-linked stocks. The case shows how the 3% price band creates a clear audit trail, reducing the grey areas that existed in the old 30-minute window. For retail investors, the key takeaway is that expiry-day volatility may shrink as manipulation becomes harder. The real test will be the upcoming monthly expiries: Nifty on Tuesday and Sensex on Thursday. Watch whether the regulator issues any further orders or if the entities' responses lead to a formal settlement.
Source: livemint.com
This story was synthesised by AI from the source linked above.
