SEBI Allows Jane Street to Resume Trading in Indian Market
Eighteen days after barring Jane Street from India’s capital markets over alleged manipulative trading in Nifty futures, the Securities and Exchange Board of India (SEBI) has permitted the New York-based proprietary trading firm to resume operations.
The decision comes after Jane Street deposited Rs 4,843.57 crore into an escrow account with a lien in favor of SEBI, the amount allegedly gained through manipulative trading practices.
According to SEBI, Jane Street has been ordered to immediately stop engaging – directly or indirectly – in any fraudulent, manipulative, or unfair trading practices, including avoiding any activities that may violate current regulations, especially those involving trading patterns mentioned in the interim order.
The regulator has also instructed stock exchanges to closely monitor the firm’s future trades and positions on an ongoing basis to ensure that it does not engage in any manipulative activity while the investigation is ongoing and until any resulting proceedings are completed.
In its statement, SEBI said that the firm has confirmed its compliance with the order, and stock exchanges have confirmed their cooperation.
Jane Street had strongly rejected SEBI’s allegations of manipulative trading in Nifty futures, calling the regulator’s claims ‘extremely inflammatory’ and saying it was ‘deeply disappointed’.
The firm denied orchestrating any ‘intentional, well-planned and sinister scheme’ and insisted that its trading on January 17, 2024, was standard arbitrage activity, a common and legitimate strategy.
SEBI’s order stated that Jane Street’s trades were disproportionately skewed towards at or above LTP (last traded price) in several key NIFTY constituents (futures segment), consistent with an attempt to create upward price pressure.
The regulator also observed that the firm was actively trading in NIFTY index futures, particularly in the final hour of trading, and that its activities were not limited to constituent stock futures alone.
SEBI’s order has made the case that prima facie, the demonstrably large and aggressive intraday activities undertaken by the Indian entity in index constituent stocks have no economic rationale other than to manipulate the underlying indices, to benefit the significantly larger index options positions created or carried by the JS Group FPI entities.
In fact, during the examination period, the net profits booked in the FPIs in the JS Group amounted to Rs 32,681 crore, SEBI said. The magnitude of this profit is significantly higher than the average quantum of assets held by these FPIs in India as of the month ends between January and May, 2025, indicating that these profits have been repatriated.
The case against Jane Street is based on SEBI’s findings that the firm’s trading activities were not neutral, but were placed in a manner that propped up the prices of index stocks during the final 2 hours of trading.
The development follows Jane Street’s request to SEBI to lift certain restrictions imposed in its interim order dated July 3. SEBI’s decision to allow the firm to re-enter the market comes despite ongoing legal proceedings.
Jane Street clarified that the deposit was made without prejudice to its legal rights and remedies, which it intends to pursue.
The Securities and Exchange Board of India (SEBI) is the regulatory body responsible for overseeing and regulating the Indian securities market.
SEBI’s decision to allow Jane Street to resume trading in the Indian market is seen as a significant development in the ongoing saga, which has had a significant impact on the Indian stock market.
As the markets await further updates on the situation, investors are advised to remain cautious and monitor the developments closely.
