The securities regulator banned a Mauritius-based unit of JPMorgan Chase & Co. from the capital market over allegations of manipulating the country’s newly introduced auction-based system for share price discovery.
The Securities and Exchange Board of India impounded 37 million rupees ($386,000), which it described as wrongful gains made by JPMorgan unit Copthall Mauritius Investment Ltd. and local firm Mansi Share and Stock Broking Ltd., according to an initial order published late Wednesday.
The order by SEBI board member Kamlesh Varshney alleged that Copthall and Mansi Share undertook manipulative trades during the closing auction window on August 13 to influence the indicative equilibrium price of the BSE Sensex Index in a way that would benefit their options positions on the benchmark.
A spokesperson for JPMorgan declined to comment, while Mansi Share didn’t immediately respond to an email request outside of regular business hours.
The order underscores the challenges facing SEBI after it introduced an auction-based system earlier this month to determine the closing prices of more than 200 stocks in the $5.1 trillion stock market. While the mechanism is intended to align India with global peers and reduce the potential for manipulation, it has faced backlash from traders after unexplained spikes in the stock benchmarks during closing session.
While the crackdown raises concerns about the process, the regulator is likely to stick with the framework, said Tejas Shah, head of derivatives at Equirus Securities Pvt. That view echoes recent comments from SEBI Chairman Tuhin Kanta Pandey, who said the new system is here to stay.
SEBI’s findings against JPMorgan come just a year after it accused US-based proprietary trading firm Jane Street Group of market manipulation. The Wall Street firm denied the charges and is currently pursuing an appeal in an Indian court seeking access to more documents.
The 46-page order on Copthall and Mansi Share show that both entities’ trading in the underlying securities during the closing auction had a corresponding impact on their expiry-day Sensex options positions.
The firms placed outsized orders in Sensex stocks during the closing auction, accounting for more than 90% of all orders in some securities identified by the regulator. They subsequently cancelled large portions of the orders, influencing indicative closing prices without executing the trades in full, according to SEBI.
“These large buy orders and sell orders, which were placed and then cancelled, allowed them to avoid losses or wrongfully profit themselves from positions in derivatives trades that otherwise would have expired worthless,” Varshney wrote.
Varshney has sought a detailed examination of the trades by Copthall and Mansi Share, which he said should be completed expeditiously and without being influenced by the findings of his order. Both entities have 21 days to respond to the allegations, including by seeking a personal hearing.
The chaotic start to the price-setting mechanism — conducted during the final 15 minutes of trading — has stoked concerns among traders about dwindling liquidity during the auction window. Average turnover during the auction has shrunk 40% from levels recorded in the final 15 minutes of trading under the previous regime.
–With assistance from Ashutosh Joshi.
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Published on August 20, 2026
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