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The action comes as part of SEBI’s ongoing probe into suspected market manipulation by Jane Street through its derivatives trading
Sebi in its order said the Jane Street Group made a total profit of Rs 36,502.12 crores across all segments through manipulative strategies in Indian stock markets.
India’s capital market regulator, the Securities and Exchange Board of India (SEBI), has barred US-based proprietary trading firm Jane Street Group and its associated entities from participating in the Indian securities market. According to a report by Bloomberg and an official order published on SEBI’s website, the firm is prohibited from buying, selling, or dealing in any securities—either directly or indirectly—until further notice.
SEBI also directed all banks to freeze withdrawals from accounts linked to Jane Street Group entities. This includes individual and jointly held accounts, unless SEBI provides specific approval for transactions.
The action comes as part of SEBI’s ongoing probe into suspected market manipulation by Jane Street through its derivatives trading activities. The firm reportedly earned over $2.3 billion in profits from equity derivatives trading in India last year.
Rs 4,843 Crore in ‘Unlawful Gains’ to Be Deposited
SEBI’s order further states that unlawful gains of Rs 4,843 crore—allegedly earned through manipulative practices—will be impounded. Jane Street entities have been directed to open an escrow account with a scheduled commercial bank in India and deposit the entire amount. Banks where these companies maintain accounts have also been instructed to not allow any debits without the regulator’s permission.
Additionally, Jane Street Group and its related entities must close or square off all existing positions within three months or by the contract’s expiry—whichever comes first.
About Jane Street
Jane Street Group LLC is a global proprietary trading firm that employs over 2,600 people across the US, Europe, and Asia. It operates in more than 45 countries, leveraging advanced algorithmic strategies to identify trading opportunities.
A Timeline of Events
Here’s a detailed timeline of the key events, as outlined in SEBI’s order:
- April 2024: SEBI begins initial analysis after media reports highlight a legal dispute involving Jane Street’s alleged unauthorized use of proprietary trading strategies in Indian markets.
- July 23, 2024: SEBI instructs the National Stock Exchange (NSE) to examine Jane Street’s trading activity to identify potential market abuse.
- August 2024: SEBI interacts with Jane Street on August 20, and the firm submits its response on August 30, explaining its trades.
- November 13, 2024: NSE submits its examination report on Jane Street’s trading patterns to SEBI.
- December 2024: SEBI observes unusual volatility in index options, especially on weekly expiry days. It notes that certain entities, including Jane Street, were running exceptionally large risk positions in cash-equivalent terms in the F&O segment.
- February 4, 2025: Based on preliminary findings, SEBI believes Jane Street is in violation of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.
- February 6, 2025: NSE, on SEBI’s instructions, issues a caution letter to Jane Street Singapore Pte Ltd and related entities, advising them to refrain from potentially manipulative trading patterns.
- February 6 & 21, 2025: Jane Street responds to the caution letter, providing justifications for its trading activities.
- May 15, 2025: Despite the warning, Jane Street continues to operate with very large cash-equivalent positions in index options, leading to further regulatory scrutiny.
What Are Cash Equivalents in F&O?
In the context of futures and options (F&O), cash equivalents refer to short-term, highly liquid instruments such as treasury bills or money market funds. These assets are often used as collateral for margin requirements, allowing traders to earn returns while actively engaging in derivatives trading.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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