What Triggered SEBI’s $566M Clampdown? Jane Street’s Trades Under the Microscope

Image Source: Live India

India’s financial watchdog SEBI has launched one of its most aggressive enforcement actions in recent memory, barring USbased trading firm Jane Street from accessing Indian securities markets. The interim order accuses the firm of manipulating index levels to profit from options trades, triggering a regulatory and investor uproar.

Key highlights:

SEBI has frozen ₹4,843 crore ($566 million) in alleged unlawful gains from Jane Street’s Indialinked entities
The firm allegedly used highfrequency strategies to inflate and then deflate the Nifty and Bank Nifty indices on expiry days
Trades were executed through three FPIs—Jane Street Asia Trading Ltd, Jane Street India Trading Pvt Ltd, and Jane Street Asia LLC
Circular trades and mirror positions created artificial liquidity and misleading price signals
SEBI flagged 18 expiryday sessions between Jan 2023 and Mar 2025 as manipulated

Regulatory and market impact:

SEBI’s order cites violations under PFUTP regulations and Section 12A of the SEBI Act
Banks have been instructed to block debits from Jane Street’s accounts without SEBI approval
The firm is required to deposit the impounded amount into an escrow account
Retail investors, already losing money in derivatives, are seen as primary victims
Market volumes may dip as other prop firms reassess their India exposure

Jane Street has denied wrongdoing and plans to engage with SEBI. The case is expected to test India’s regulatory resilience in the face of complex global trading strategies.

Sources: CNBC, WION, Business Today, The Week, Economic Times, Reuters, PTI, SEBI Interim Order Filings