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SEBI lifted the trading ban on Copthall Mauritius Investment Ltd, a JPMorgan Chase & Co unit, and on Mansi Share and Stock Broking after they deposited the alleged unlawful gains.
Copthall deposited about ₹2.96 crore (₹29.6 million) in a bank account as required by SEBI's interim order.
SEBI's interim order alleged manipulative trading on 13 August in the BSE closing auction session, aimed at moving the indicative equilibrium price of the Sensex to benefit the entities' index options positions.
The entities may trade again, but the investigation continues; SEBI will pass a confirmatory order after studying their replies and granting personal hearings, with 21 days given to respond.
Copthall is a Mauritius-registered entity and is distinct from J.P. Morgan India Pvt Ltd, which is SEBI-registered as a stock broker and merchant banker and was not affected by the ban.
Instead of taking the last traded price, an exchange collects buy and sell orders in a short window and computes the single price at which the most shares can trade — the indicative equilibrium price. That price becomes the official close.
Simple Analogy: A sealed-bid auction at the end of the day rather than a final over-the-counter handshake.
Statutory regulator of India's securities market; can pass interim orders barring entities from trading and direct impounding of alleged unlawful gains
India's oldest stock exchange, established in 1875; publishes the Sensex, the 30-share benchmark at the centre of this case
Gives SEBI statutory status and the power to pass interim and confirmatory orders, restrain entities from the securities market and direct disgorgement of unlawful gains.
The framework under which manipulative trading intended to distort a benchmark's price is proceeded against.
General Awareness > Financial Markets and Regulators
GS Paper 3 > Indian Economy — capital markets and regulatory bodies
A SEBI order passed during an investigation, typically restraining an entity from trading or impounding suspected gains, before final findings.
A direction to surrender profits made through unlawful conduct; the deposit here was of alleged unlawful gains.
The price at which the maximum quantity can be matched in an auction; it becomes the closing price of the security.