SEBI Bars JPMorgan Unit for Closing Auction Manipulation

India's market regulator has banned a JPMorgan Chase unit and a domestic brokerage from the securities market for allegedly manipulating a new auction-based closing price system just days after its launch, signaling strict oversight of the critical mechanism.

In an interim order issued on August 19, the Securities and Exchange Board of India (SEBI) barred Copthall Mauritius Investment Ltd., a Mauritius-based entity owned by JPMorgan, and Mansi Share and Stock Broking Ltd. The action, which took effect six days after the alleged violations on August 13, impounds approximately 3.7 crore rupees (about $386,000) in alleged wrongful gains.

The regulator's investigation centers on trades conducted during the Closing Auction Session (CAS) on August 13, a day when weekly derivatives contracts linked to the benchmark BSE Sensex expired. According to SEBI's order, Copthall placed aggressive buy orders while Mansi placed large sell orders during the auction, distorting the indicative closing prices of Sensex constituent stocks. Mansi later cancelled much of its sell-side activity. SEBI stated these actions influenced the indicative price without full execution of the orders, allowing the...