SEBI has lifted the broad trading ban on JPMorgan’s Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking after the firms deposited alleged unlawful gains, but the market-manipulation investigation remains open.
The relief was reported by Reuters on September 9, 2026, citing two sources familiar with the matter. Copthall Mauritius continues to be barred from participating in the closing auction session while the regulator examines the alleged manipulation of Sensex-linked securities.
The two firms were originally restrained in August after SEBI alleged that their trades distorted prices during the newly introduced closing auction. The latest decision permits wider market participation but does not amount to an exoneration.
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Deposits Secure Alleged Unlawful Gains
Reuters reported that the two entities deposited a combined ₹3.68 crore before the trading restrictions were relaxed. A separate Bloomberg report placed the amount at ₹2.96 crore, citing people familiar with the matter.
The discrepancy has not been reconciled against the latest official order. Both reports agree that the deposits relate to alleged gains from trading during the August 13 closing auction.
The amount should not be described as a final fine or settlement. Such deposits can be required while a regulator continues investigating and determining whether unlawful gains were actually made.
The firms will have an opportunity to respond to the allegations. SEBI is expected to examine their submissions and provide a hearing before issuing a confirmatory order.
What SEBI Alleged Happened on August 13
The case concerns trading during the BSE’s closing auction session on August 13, a day when Sensex-linked derivatives were expiring.
According to the regulator’s interim findings, Copthall placed aggressive buy orders while Mansi placed large sell orders in selected stocks. SEBI alleged that the trading influenced the indicative equilibrium price used to determine the closing value of Sensex constituents.
The regulator also examined whether the resulting price movements benefited options positions linked to the benchmark index.
These remain allegations at this stage. The investigation must establish whether the trades were manipulative, whether the firms acted with the required intent and how any alleged gains were calculated.
The exact individual deposit amounts and complete transaction-level findings should be checked against the official order before publication.
How the Closing Auction Works
A closing auction is a short trading period near the end of the market day during which buy and sell orders are collected and matched to determine an official closing price.
India introduced the mechanism on August 3, 2026, for more than 200 stocks. The session lasts approximately 20 minutes and is intended to improve the process of establishing closing prices.
Rather than relying only on the final ordinary trade, the auction uses an order-matching process to arrive at a price based on available demand and supply.
This matters because closing prices are used by investors, funds and derivatives markets. If the price of an index constituent is artificially influenced, it can affect the benchmark and potentially the value of contracts linked to it.
A large order is not automatically illegal. The regulatory question is whether the trading was genuine or deliberately designed to create a misleading price.
Why the New Mechanism Is Under Review
The closing auction’s first month has been marked by sharp movements, differences between exchange closing levels and concerns about the effect on derivatives prices.
On September 3, SEBI announced that it would review the methodology used to determine derivatives settlement prices following feedback from market participants.
The review followed an episode in which the Sensex’s indicative closing level fell sharply during the auction before recovering, while premiums on certain put options surged.
The regulator is examining whether changes are needed to prevent unusual auction movements from producing disproportionate effects in the derivatives market.
The review is separate from the investigation into Copthall and Mansi, although both concern the new mechanism’s vulnerability to disruptive trading.
Relief Does Not End the Investigation
Copthall Mauritius is a Mauritius-based JPMorgan entity with a history of investment activity in India. It is separate from J.P. Morgan India Pvt Ltd, the locally registered stockbroker and merchant banker.
The original order against Copthall therefore did not directly prohibit all JPMorgan operations in India. The latest relief likewise concerns the specific entities and restrictions identified by SEBI.
The regulator is expected to consider the firms’ formal responses and determine whether the interim allegations warrant further action.
Until that process is completed, the allegations should not be presented as established market manipulation. Equally, the lifting of the broad ban does not mean the regulator has withdrawn its case.
What this means for you: Investors should distinguish between an interim trading restriction, a final penalty and a completed investigation. The case does not establish that ordinary JPMorgan banking customers or all investors using its Indian brokerage are affected. Derivatives traders should also understand that unusual movements during closing auctions can influence settlement values, particularly around expiry, and should manage positions with that risk in mind.
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