From Wall Street Wizards to SEBI’s Watchlist: Jane Street’s Indian Odyssey Hits a Roadblock

FIndia's market watchdog, the Securities and Exchange Board of India (SEBI), banned global trading giant Jane Street Group and its related entities from accessing the Indian securities market in a sweeping interim order. The move comes after a high-profile investigation into charges of market manipulation through aggressive derivatives trading tactics.

 

Key Highlights:

 

Market Ban: SEBI has restricted Jane Street and the group companies of Jane Street from buying, selling, or dealing in Indian securities, directly or indirectly, until further notice. This entails freezing their bank current accounts and preventing any debits except with the express sanction of SEBI.

 

Disgorgement Order: The regulator directed Jane Street to place ₹4,844 crore (approximately $570 million)—the presumed illegal proceeds—into an escrow account with a scheduled commercial bank in India.

 

Mandated Position Closing: Jane Street will close or square-off all open positions within three months or on the expiration of contracts, whichever is sooner.

 

Charges Alleged: SEBI's letter charges Jane Street with manipulating the Bank Nifty index by creating huge options positions and then affecting underlying shares' prices with large trading volumes, especially on weekly expiry days.

 

Continuous Monitoring: SEBI will observe all existing positions of Jane Street closely until the investigation is completed.

 

Jane Street's Response: Jane Street has responded to the findings of SEBI and informed that it will "further engage with the regulator," suggesting a looming regulatory and legal battle.

 

Wider Context: The probe into Jane Street is one of SEBI's increased areas of focus on high-frequency and algorithmic trading activity in India's dynamic derivatives market, which has seen explosive growth and increased foreign institutional participation over the past few years.

 

Source: CNBCTV18, Business Standard, Moneycontrol, Reuters, Bloomberg, MarketScreener.