SEBI’s CAS Manipulation Probe: What Happened During Sensex Expiry?

The closing price of an index is not just a number on the screen. For derivatives traders, it can decide the final profit or loss on expiry contracts. This is why SEBI’s recent action over alleged manipulation during the Sensex Closing Auction Session (CAS) has attracted market attention.

In its interim order, SEBI stated that two market entities, namely, Copthall Mauritius Investment Ltd and Mansi Share & Stock Broking Private Ltd had indulged in transactions in the Sensex expiry session on August 13, 2026 that seemed to have affected the final closing price of the index. Both the companies have been subjected to some interim actions by SEBI, which include not allowing them to enter into the securities market, while further examination continues.

The episode has also brought attention to CAS, a recently introduced mechanism designed to improve the way closing prices are discovered in Indian markets.

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What is the Closing Auction Session?

SEBI introduced the Closing Auction Session framework from August 3, 2026, replacing the earlier method where closing prices were calculated using the average traded price during the final 30 minutes of continuous trading. Under CAS, trading in eligible stocks shifts to a closing auction after the market closes at 3:15 PM, with buy and sell orders matched at an equilibrium price to determine the official closing price.

The session becomes particularly important on derivative expiry days because the final index closing value is used for settlement of contracts linked to the index.

On August 13, which was a Sensex weekly expiry day, SEBI’s surveillance systems detected unusual movements in the Indicative Equilibrium Price (IEP) during the CAS period.

Sudden Sensex Moves Raised Regulatory Concerns

According to SEBI’s order, the Sensex reference price at 3:15 PM stood at 77,829.6. The closing value determined through CAS was 78,079.96.

However, the movement during the auction window was not gradual. The regulator highlighted three sharp spikes in the Sensex IEP during the session.

The first move saw the IEP jump 362.02 points within just two seconds, rising from 77,661.40 to 78,023.42. The second spike added 132.67 points in 12 seconds. The third and largest move pushed the index higher by 405.08 points in 28 seconds, taking it from 77,787.94 to 78,193.02.

SEBI examined the order patterns behind these sudden movements and found that a significant portion of the activity came from a few entities.

How The Alleged Manipulation Happened?

The regulator’s investigation focused on the trading activity of Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Private Ltd.

Copthall emerged as the largest buyer during the CAS session. SEBI stated that the entity accounted for 86.6% of the total gross buy value among the major buyers in Sensex constituent stocks.

During the first spike, Copthall placed 88 buy orders within two seconds. The total value of these orders was around ₹66.64 crore, of which Copthall’s contribution was approximately ₹66.57 crore, accounting for nearly 99.91% of the total buy order value during that period.

According to SEBI, these orders were placed at prices substantially higher than the reference price, close to the ceiling level permitted under the CAS regime. This happened within a relatively short period of time for various Sensex stocks, which is quite unusual.

The second part of the activity involved Mansi Share and Stock Broking. SEBI observed that the entity placed a large number of sell orders in Sensex stocks during the auction period. Most of these orders were later cancelled, and the regulator examined their role in the movement of the index. 

The order stated that Mansi cancelled 12,65,000 out of 12,77,000 sell orders, representing a cancellation rate of 99.06%.

SEBI’s preliminary view was that the combined trading activity of both entities appeared to influence the Sensex closing value during a period when expiry-linked positions were being settled.

Why CAS Became The Centre of Attention?

CAS was introduced to make closing price discovery more transparent and align Indian markets with global practices. The mechanism allows market participants to place orders during a defined auction period, with the final price determined through matching of buy and sell orders.

However, the case under discussion underscored the significance of liquidity and surveillance in the process. Since closing prices have an impact on derivative settlements, any short-term movement within the auction period will have its significance.

The regulator stated that any attempt to disturb fair price discovery in CAS can undermine confidence in the mechanism.

SEBI’s Action Against The Entities

Following its preliminary findings, SEBI passed an ex-parte interim order against Copthall Mauritius Investment Ltd and Mansi Share and Stock Broking Private Ltd.

The regulator restricted both entities from accessing the securities market and prohibited them from participating in the Closing Auction Session until further directions.

SEBI also directed measures to impound the alleged wrongful gains arising from the activity. The regulator estimated wrongful gains of ₹2.96 crore for Copthall and ₹71.64 lakh for Mansi, taking the total amount to approximately ₹3.68 crore.

The entities have also been restricted from withdrawing or disposing of certain assets linked to the proceedings until further orders.

Conclusion

The episode does not question the objective behind CAS but highlights the importance of safeguards when a new market mechanism is introduced. The closing price is critical for index valuation, benchmark tracking and settlement of derivative contracts.

SEBI’s prompt response indicates that there are vigilance measures in place that monitor any unusual market behavior, particularly during expiries.

For the participants in the market, this is a reminder that liquidity, order behavior, and close prices continue to come under heavy regulatory scrutiny. The more the CAS develops, the more important it will become to keep transparency and the investors’ trust intact.