2 weeks ago
SEBI Blocks Two Entities Over Alleged Sensex Auction Manipulation
SEBI is the regulator that watches India's securities markets.
It said two entities may have used large orders to move the Sensex during a special end-of-day auction.
The auction helps determine the closing prices of stocks.
The activity happened on 13 August, when Sensex-related derivatives were expiring.
Copthall placed many large buy orders at prices above the reference prices.
Mansi placed large sell orders at prices below the reference prices and then cancelled them quickly.
SEBI said these actions may have pushed the index in directions that helped the entities' derivatives positions.
The regulator estimated that Copthall gained ₹2.96 crore and Mansi gained ₹71.65 lakh.
SEBI has temporarily blocked both entities from the market while its proceedings continue.
SEBI issued its first interim order concerning alleged manipulation in the Closing Auction Session, introduced on 3 August.
The regulator said three sharp Sensex spikes occurred during the 13 August weekly derivatives-expiry session.
Copthall allegedly placed aggressive buy orders worth ₹191.29 crore and accounted for most buying during the spikes.
Mansi allegedly placed sell orders for 12.65 lakh shares across eight Sensex stocks before cancelling them within seconds.
SEBI estimated combined wrongful gains of ₹3.68 crore and barred both entities from the securities market and equity closing auction until further orders.
- Who
- The Securities and Exchange Board of India (SEBI), Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Pvt Ltd.
- What
- SEBI alleged that the two entities manipulated the Sensex Closing Auction Session and ordered combined disgorgement of ₹3.68 crore while restricting their market access.
- Where
- During the Sensex Closing Auction Session in the Indian securities market.
- When
- The alleged activity occurred on 13 August, the weekly expiry day for Sensex derivatives; SEBI issued its interim order on Wednesday.
- Why
- SEBI said the orders appeared intended to influence the indicative equilibrium price and benefit the entities' derivatives positions.
Key facts
- Regulator
- Securities and Exchange Board of India (SEBI)
- Entities named
- Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Pvt Ltd
- Closing Auction Session debut
- 3 August
- Alleged trading date
- 13 August, a weekly Sensex derivatives-expiry day
- Sensex movements
- The index rose 362.02 points in about two seconds, 132.67 points in about 12 seconds and 405.08 points in 28 seconds
- Estimated alleged gains
- ₹2.96 crore for Copthall and ₹71.65 lakh for Mansi
- Regulatory action
- Combined ₹3.68 crore disgorgement, market access restrictions and a ban on participating in the equity Closing Auction Session until further orders
Quotes
Sebi order
Regulatory order issued by the Securities and Exchange Board of India
“This also shows that the sell orders for 5 minutes were prima facie meant to suppress the IEP rather than performing a legitimate sell transaction. One economic rationale for such trading could prima facie be that the F&O position of the entity provided an economic incentive for engineering such movements in SENSEX IEP until their sell orders remained in the system.”
livemint.com
Sources
Related news
SEBI Bans Two Entities Over Alleged Closing Auction Manipulation
SEBI Fines Two Firms Over Closing Auction Manipulation
India Bars JPMorgan Unit Over Alleged Closing Auction Manipulation
SEBI Examines Closing Auction Trades After Nifty Swings Raise Concerns
SEBI Warns Immediate Action Against Closing Auction Manipulation
Closing Auction Session Faces Volatility Despite Hopes For Stability
J&K FDA Bans 10 Ghee Batches, Orders Immediate Market Withdrawal
