BACKGROUND
The Securities and Exchange Board of India (“SEBI”) passed an Ex-Parte Interim Order dated 19 August 2026 against Copthall Mauritius Investment Limited (“Copthall”) and Mansi Share and Stock Broking Private Limited (“Mansi”) in relation to alleged manipulative trading during the Closing Auction Session (“CAS”) on the BSE SENSEX expiry day.

SEBI's CAS framework, introduced vide Circular dated 16 January 2026 and made effective from 3 August 2026, provides for determination of the closing price through a dedicated auction mechanism based on the interaction of buy and sell orders. The framework replaced the earlier methodology based on the volume-weighted average price (“VWAP”) for securities covered under the CAS framework, which determined the price of securities based on the closing price of the security or focused on the weight of trades executed in the last 30 minutes of the trading session. Now, under the CAS framework, the price of securities is determined based on buy and sell orders in a single pool, executed at a single equilibrium price in a dedicated 20-minute daily auction timeline.

SEBI’S FINDING
SEBI prima facie found that the trading activity of Copthall and Mansi was linked to their outstanding SENSEX option positions and was undertaken to influence the Indicative Equilibrium Price (“IEP”) and closing price of the SENSEX so as to obtain a favourable payoff from their expiry-day F&O positions.

On 13 August 2026, SEBI's surveillance observed three sharp movements in the SENSEX during the CAS. Upon examination of the trade and order logs, SEBI observed that these movements coincided with large and aggressive buy orders placed by Copthall and sell orders placed by Mansi in SENSEX constituent securities, which were subsequently cancelled. SEBI accordingly examined the trading activity of the two entities and its linkage with their outstanding SENSEX option positions. SEBI noted that the material on record did not prima facie indicate that the two Noticees acted in concert. Rather, each appeared to have adopted a separate strategy to move the SENSEX in a direction favourable to its respective F&O positions.

SEBI'S DIRECTIONS
SEBI directed that the bank accounts of Copthall and Mansi be impounded to the extent of ₹2,96,16,000 and ₹71,64,773 respectively, aggregating a total of ₹3,67,80,773. SEBI also debarred the noticees from accessing the securities markets and prohibited them from participating in the CAS, including placing, modifying or cancelling orders. Restrictions were also imposed on their bank and demat accounts, transfer/redemption of securities and disposal of assets without SEBI's permission. They were further directed to cooperate with SEBI's ongoing examination/investigation.

MHCO COMMENT
The order is significant in the context of the newly introduced CAS framework and SEBI's surveillance of potential attempts to influence the closing price through order placement and cancellation. The order demonstrates that SEBI is examining the nature, timing and price of orders, their impact on the IEP, subsequent cancellation of orders and the corresponding F&O positions of the concerned entities.

The directions are interim in nature and are based on prima facie findings pending further investigation. SEBI has expressly clarified that the detailed investigation is to proceed independently of the prima facie observations contained in the interim order. Notably, SEBI has not alleged that Copthall and Mansi acted in concert. The findings against the two entities are based on their respective trading patterns and F&O positions. Since the order is ex-parte and interim in nature, the findings remain subject to SEBI's further examination, as well as the Noticees' replies and opportunity of hearing.

By:

• Mr. Bhushan Shah, Partner
• Ms. Sayali Kshirsagar, Associate

This update was released on 21 Aug 2026.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or contact@mhcolaw.com for any assistance.

Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
Advocates, Solicitors and Notaries
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