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SEBI Bans Two Entities Over Closing Auction Session Spoofing

20 August 20261 min read
BANKING & FINANCESEBI Bans TwoEntities OverClosing AuctionSession Spoofing20 August 2026safalsetu.com

Why in the news

In August 2026, SEBI acted swiftly against two market participants accused of distorting closing prices with spoofed orders in the Closing Auction Session.

Key facts

  • Entities barred: Copthall Mauritius Investment and Mansi Share & Stock Broking.
  • Method: very large orders placed and cancelled within seconds.
  • This is spoofing: orders entered with no plan to execute, only to nudge the price.
  • Effect: avoiding losses or earning gains on derivatives positions.
TermMeaning
ImpoundingSEBI holds money seen as wrongful gain until final proceedings
Proprietary tradingA broker trading with its own money, not clients’

Why the close matters

All buy and sell orders are matched at one equilibrium price rather than an average over 30 minutes. This price settles derivatives, so a small shift can turn an option profitable, and a short window lets a big order move it cheaply.

About SEBI

Securities market regulator under the SEBI Act, 1992, based in Mumbai.

Exam angle

  • Spoofing is barred by the PFUTP Regulations (Prohibition of Fraudulent and Unfair Trade Practices).
  • SEBI law: SEBI Act, 1992; HQ Mumbai.

Test yourself

1. Which regulator barred Copthall Mauritius Investment and Mansi Share & Stock Broking over Closing Auction Session trades?

SEBI issued the bar.

2. In the SEBI Closing Auction Session case, what is spoofing?

Spoofing is placing orders without intent to execute, then withdrawing them.

3. Spoofing is prohibited under which SEBI regulations, as noted in the Closing Auction Session case?

PFUTP means Prohibition of Fraudulent and Unfair Trade Practices.