Why Can’t Jane Street Escape SEBI’s Grip in India?
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Synopsis
Zerodha’s Nithin Kamath praises SEBI's actions against Jane Street for market manipulation, highlighting India's regulatory strength. However, he warns of potential impacts on retail trading and market dynamics. Join us as we explore the implications of this landmark decision.
Key Takeaways
- SEBI's decisive action against Jane Street underscores India's strong regulatory framework.
- Jane Street is accused of manipulating market indices for profit.
- Concerns arise about the impact on retail trading volumes.
- The dependency of the Indian market on proprietary trading firms is critical.
- The future of F&O volumes will reveal market reliance on these entities.
New Delhi, July 4 (NationPress) Zerodha’s co-founder and CEO Nithin Kamath commended the Securities and Exchange Board of India (SEBI) for its decisive action against the US-based trading firm Jane Street. He highlighted that India’s strong regulatory environment prevents the adoption of market practices prevalent in Western countries.
In a post on the social media platform X, Kamath stated: "None of these practices would be permitted in India, thanks to our regulators," referring to US market structures like dark pools and payment for order flow—mechanisms frequently criticized for benefitting hedge funds at the expense of retail investors.
Kamath’s remarks followed SEBI’s interim order, which accused Jane Street and its associated entities of manipulating the Bank Nifty index through intricate intra-day strategies.
The regulator discovered that the firm garnered substantial profits exceeding Rs 43,289 crore between January 2023 and March 2025, primarily through options trades, by artificially inflating and then lowering the index, particularly on expiry days.
Kamath emphasized the gravity of the alleged manipulation, stating: "Kudos to SEBI for targeting Jane Street. If the claims hold true, it’s a clear case of market manipulation."
He expressed concern regarding the potential repercussions of this action, noting that proprietary trading firms like Jane Street account for nearly 50 percent of India’s options trading volumes.
If these firms decide to withdraw in response to SEBI’s enforcement, the retail investor participation—currently around 35 percent—may also suffer.
"This could spell trouble for both exchanges and brokers," Kamath asserted.
He further mentioned that the forthcoming days would be crucial in assessing the Indian market’s dependency on large proprietary trading firms.
“F&O volumes might illustrate just how reliant we are on these trading giants,” he concluded.
Point of View
It is crucial to recognize the balance between regulatory oversight and market dynamics. SEBI's actions reflect a commitment to maintaining integrity within India's financial markets. However, the potential ramifications on retail trading and market participation must be closely monitored.
NationPress
20/07/2025
Frequently Asked Questions
What actions did SEBI take against Jane Street?
SEBI issued an interim order accusing Jane Street of manipulating the Bank Nifty index using complex trading strategies.
How much profit did Jane Street allegedly make?
Jane Street reportedly booked profits exceeding Rs 43,289 crore between January 2023 and March 2025.
What are the concerns raised by Nithin Kamath?
Kamath expressed concerns that the crackdown on Jane Street could negatively impact retail trading volumes in India.
What role do proprietary trading firms play in India?
Proprietary trading firms like Jane Street contribute nearly 50% of India’s options trading volumes.
Why is this situation important for retail investors?
The actions against Jane Street may influence retail participation, which currently makes up about 35% of the market.
