SEBI's swift ban on JPMorgan unit signals tough stance on Closing Auction System manipulation

India's securities regulator, SEBI, banned a JPMorgan unit and a local brokerage from the capital market within six days of alleged manipulative trading, a swift action market watchers say is unprecedented and serves as a warning against attempts to manipulate the new Closing Auction System. The interim order against Copthall Mauritius Investment Ltd. and Mansi Share and Stock Broking Ltd. alleges they executed manipulative trades during the closing auction window to influence the BSE Sensex, benefiting their options positions. SEBI's rapid response contrasts with past cases that often took years, reflecting lessons from the Jane Street investigation. The regulator's decisive action underscores its commitment to the new system, which has faced pushback from traders due to unexplained price spikes. The ban will be lifted once the entities repay nearly 37 million rupees in unlawful gains, with SEBI Chairman stating the system is here to stay.