India's SEBI Bans JPMorgan's Mauritius Subsidiary from Market Access
Nashnova编辑部
India's securities regulator barred Copthall Mauritius Investment, a JPMorgan entity, from its capital markets and seized roughly ₹37 million in illegal gains — the first manipulation case since SEBI launched a new closing-auction mechanism, exposing an early design gap.
What happened?
SEBI issued a preliminary order barring Copthall Mauritius Investment Ltd., a JPMorgan-affiliated entity registered in Mauritius, from Indian capital markets.
Local broker Mansi Share and Stock Broking Ltd. was also penalized; the two must forfeit a combined ₹37 million (roughly $386,000) in illegal profits.
This means → a top-tier global bank's offshore arm has been effectively blacklisted in India — a signal far larger than the fine itself.
How did they manipulate the market?
On August 13, Copthall and Mansi placed large orders during India's closing-auction window — the final minutes of trading when a competitive auction sets the closing price — then rapidly cancelled them.
Those phantom orders distorted the indicative equilibrium price of the Sensex, allowing Copthall's Sensex index-option positions to profit.
In plain terms = they posted big buy and sell orders to push the price where they needed it, locked in option gains, then pulled the orders — fake orders to create a fake price.
Why does the new mechanism matter here?
Earlier this month SEBI introduced an auction-based closing-price mechanism — replacing last-trade pricing with a call auction — covering over 200 stocks, aiming to align with global standards.
Yet almost immediately after launch, India's benchmark index showed unexplained volatility during the auction window, drawing sharp pushback from market participants.
This reflects a painful irony: the mechanism was designed to reduce manipulation risk, but thin liquidity and immature rules gave manipulators an opening instead.
What happens next?
SEBI has ordered a detailed investigation into both firms' trades, to proceed swiftly and independently of this preliminary ruling.
Copthall and Mansi each have 21 days to respond to the charges and may request a hearing.
As of publication, neither JPMorgan nor Mansi Share and Stock Broking has commented.
Content is for reference only, not financial advice.