SEBI Cracks Down On Jane Street: Rs 4,843 Crore In Illegal Gains Under Scanner

According to SEBI’s order, Jane Street executed a systematic strategy on index option expiry days, primarily between January 1, 2023, and March 31, 2025

A specific example cited in the order pertains to January 17, 2024, when Jane Street is reported to have purchased Bank Nifty futures worth Rs 4,370 crore and sold options totaling Rs 32,115 crore

Source : PTI

The Securities and Exchange Board of India (SEBI) has taken strict action against US-based trading firm Jane Street and three of its affiliated entities, barring them from participating in the Indian securities market. The market regulator has directed the entities to collectively deposit Rs 4,843.5 crore, which it identifies as unlawful gains, into a designated escrow account. In addition, a debit freeze has been imposed on their bank accounts.

The entities under SEBI’s lens include JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd, and Jane Street Asia Trading Ltd. SEBI's move follows findings of alleged manipulative trading practices carried out in the Bank Nifty index options.

Allegations Of Market Distortion On Expiry Days

According to SEBI’s order, Jane Street executed a systematic strategy on index option expiry days, primarily between January 1, 2023, and March 31, 2025. On 14 such days, the firm allegedly initiated large trades in the morning—buying Bank Nifty futures and shares in the cash market while simultaneously offloading a significant volume of Bank Nifty options. Post-noon, they are said to have reversed their futures positions to influence the index’s closing, thereby impacting market equilibrium.

A specific example cited in the order pertains to January 17, 2024, when Jane Street is reported to have purchased Bank Nifty futures worth Rs 4,370 crore and sold options totaling Rs 32,115 crore. Later in the day, the firm reportedly offloaded futures worth Rs 5,372 crore, creating a peak short position of Rs 46,620 crore. This maneuver is said to have led to a subdued Bank Nifty close, allowing Jane Street to earn Rs 735 crore in options trading, despite incurring intraday losses of Rs 61.6 crore in the cash and futures segments.

Regulatory Action And Response

SEBI has issued an interim order, effective immediately, that restricts all Jane Street entities operating in India from trading or engaging in any market-related activities. The directive is part of the regulator’s broader enforcement initiative to ensure market integrity and curb unfair practices.

"Entities are restrained from accessing the securities market and are further prohibited from buying, selling, or otherwise dealing in securities, direct or indirect," SEBI stated in the order.

In response, Jane Street has contested SEBI’s conclusions and stated it intends to engage further with the regulator to clarify its position.