Why Has SEBI Prohibited US Firm Jane Street from Indian Markets?
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Synopsis
In a significant move, SEBI has banned US trading firm Jane Street and its affiliates from Indian markets, demanding the deposit of illegal profits totaling Rs 4,843 crore. This enforcement action comes amidst allegations of market manipulation, raising questions about regulatory oversight and the operations of foreign entities in India.
Key Takeaways
- SEBI has imposed a ban on Jane Street and its affiliates.
- They must deposit Rs 4,843.5 crore in illegal gains.
- A debit freeze has been ordered on their bank accounts.
- Jane Street allegedly manipulated the market on several expiry days.
- The firm disputes SEBI's findings and intends to engage further.
Mumbai, July 4 (NationPress) The Securities and Exchange Board of India (SEBI) has issued a ban on the US trading firm Jane Street along with three of its affiliated entities, prohibiting them from participating in the market. They have been instructed to deposit illegal earnings amounting to Rs 4,843.5 crore into an account designated for the markets regulator.
In its ruling, the regulator has also mandated a debit freeze on the bank accounts of these entities, which consist of JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd, and Jane Street Asia Trading Ltd.
As per the SEBI order, Jane Street accrued Rs 43,289.33 crore in profits through trading in index options on Indian exchanges from January 1, 2023, to March 31, 2025.
According to the order, on 14 expiry days, Jane Street aggressively purchased Bank Nifty futures in substantial volumes in both the cash and futures segments, while also selling Bank Nifty options in large quantities, primarily in the morning.
Post-noon, the entities of Jane Street continued to sell significant volumes in Bank Nifty futures, impacting the closing index on expiry days.
On the morning of January 17, 2024, Jane Street made aggressive purchases of Bank Nifty futures worth Rs 4,370 crore and sold Bank Nifty options for Rs 32,115 crore. After noon, it further sold Bank Nifty futures for Rs 5,372 crore.
This resulted in a peak short position of Rs 46,620 crore in the Bank Nifty index options segment, leading to a subdued closing for Bank Nifty.
Jane Street realized a profit of Rs 735 crore in the options segment, while incurring an intraday loss of Rs 61.6 crore in cash and futures, yielding a net gain of Rs 673.4 crore on that expiry day.
The market regulator's order serves as an enforcement measure, affecting all Jane Street Group entities operating in India and limiting their ability to engage in any market-related activities.
“Entities are restricted from accessing the securities market and are consequently barred from purchasing, selling, or otherwise engaging in securities, either directly or indirectly,” SEBI stated in its order.
Jane Street has contested the findings of SEBI's interim order and plans to further engage with the regulator.
Point of View
It is crucial to recognize that regulatory actions like SEBI's ban on Jane Street underscore the importance of maintaining market integrity. While foreign investment is vital for economic growth, oversight is essential to prevent manipulation and ensure a fair trading environment. This action serves as a reminder that all entities, regardless of their origin, must adhere to the rules governing the Indian markets.
NationPress
15/07/2025
Frequently Asked Questions
Why has SEBI banned Jane Street?
SEBI banned Jane Street due to alleged market manipulation and demanded the deposit of illegal gains amounting to Rs 4,843.5 crore.
What entities are affected by this SEBI order?
The order affects Jane Street and three of its affiliated entities, including JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd, and Jane Street Asia Trading Ltd.
What are the financial implications for Jane Street?
Jane Street is required to deposit Rs 4,843.5 crore in illegal gains and has been barred from trading in Indian markets.
How did Jane Street manipulate the market?
Jane Street allegedly engaged in aggressive buying and selling of Bank Nifty futures and options, significantly influencing market prices.
What is the future for Jane Street in India?
Jane Street has disputed SEBI's findings and plans to engage further with the regulator, but currently, it is barred from market activities.
