The Securities and Exchange Board of India (SEBI) has taken interim action against two entities over alleged manipulation of the Sensex closing price during the Closing Auction Session held on August 13. The regulator has barred CLOPTAL Mauritius and Mansi Share from accessing the securities market and participating in the Closing Auction Session. Both entities have been accused of using aggressive buying and selling in Sensex constituent stocks to influence the closing price and potentially gain from expiry-day Sensex options positions.
According to SEBI, the activities of the two entities were linked to changes in the Sensex Indicative Equilibrium Price (IEP). The regulator has alleged that the cash-market orders and trading activities were connected to the entities’ expiry-day Sensex options positions. SEBI has prima facie concluded that the transactions were aimed at influencing price discovery and generating wrongful gains through derivatives positions.
The regulator alleged that CLOPTAL Mauritius placed buy orders in various Sensex constituent stocks at prices around 3% above the reference price. During the first Sensex spike, CLOPTAL accounted for 99.91% of the total buy-order value, while its share stood at 96.09% during the second spike. During another related period, the entity accounted for 85.21% of the total buy-order value, according to SEBI.
SEBI said CLOPTAL subsequently cancelled buy orders worth approximately ₹98.12 crore. The regulator has alleged that the large-scale placement and subsequent cancellation of these orders was intended to influence the Sensex IEP. SEBI has estimated the entity’s alleged wrongful gains at ₹2.96 crore.
Mansi Share, meanwhile, has been accused of placing aggressive sell orders in eight Sensex constituent stocks. According to SEBI, the entity placed sell orders covering a total of 12.65 lakh shares. Around 7.05 lakh of these shares were allegedly offered at prices 2.5% below the reference price.
The regulator said Mansi Share subsequently cancelled all the sell orders covering 12.65 lakh shares. SEBI linked the cash-market activity to the entity’s expiry-day Sensex options positions and estimated its alleged wrongful gains at approximately ₹71.65 lakh.
The combined alleged wrongful gains of the two entities have been estimated at around ₹3.68 crore. SEBI has ordered the amount to be impounded and directed that the money be maintained in fixed deposits with a lien in favour of the regulator. The measure is intended to secure the alleged gains while further regulatory proceedings continue.
Under its interim directions, SEBI has prohibited both entities from accessing the securities market. They have also been barred from participating in the Closing Auction Session. In addition, the regulator has directed banks to restrict debit transactions from the accounts of the noticees, except for specified permitted transactions.
SEBI said the interim measures were necessary to protect fair price discovery and maintain the integrity of the securities market. The regulator has prima facie held that the alleged activities fall within the provisions of Section 12A of the Securities and Exchange Board of India Act and Regulations 3 and 4 of the Prevention of Fraudulent and Unfair Trade Practices Regulations.
The action comes amid increased regulatory scrutiny of trading activity around expiry days, particularly where cash-market transactions could potentially influence prices relevant to derivatives positions. The Closing Auction Session is designed to facilitate orderly and transparent price discovery. According to the regulator’s allegations, placing large orders and subsequently cancelling them can distort the indicative price if undertaken with the intention of influencing market participants or derivative positions.
SEBI’s interim action does not by itself constitute a final finding of wrongdoing. The allegations against CLOPTAL Mauritius and Mansi Share are based on the regulator’s prima facie assessment, and further proceedings will determine the final position in the matter. The case highlights the regulator’s growing focus on order behaviour, closing-price formation and potential links between cash-market activity and expiry-day derivatives positions.
