In a significant regulatory development, the Securities and Exchange Board of India (SEBI) issued an interim order barring the Jane Street Group and its associated entities from participating in Indian securities markets. The order also involved the impounding of approximately ₹4,843.57 crore, which SEBI claimed were unlawful gains made through manipulative trading strategies. This move marks one of SEBI’s most stringent actions against a foreign trading entity operating in the Indian financial markets.
Jane Street, a prominent global trading firm specializing in algorithmic and high-frequency trading, was accused of employing a complex strategy to manipulate the Bank Nifty index. According to SEBI’s findings, the firm followed a two-stage pattern that involved purchasing large volumes of stocks and futures early in the trading session, thereby artificially inflating the index’s value. Simultaneously, Jane Street placed short positions in index options, effectively betting that the index would fall later in the day. Toward the session's end, the firm would then offload its holdings, driving down the index and profiting substantially from its earlier short positions.
This trading strategy, SEBI noted, was deployed repeatedly, particularly on derivatives expiry days—times when trading volumes are at their peak and the potential to influence market direction is significantly higher. The pattern was observed between January 2023 and May 2025. The regulator concluded that these were not isolated incidents but part of a deliberate, sustained approach to create artificial price movements, adversely affecting market integrity and investor confidence.
SEBI’s 105-page order provided detailed evidence of the scheme and calculated the firm’s profits from the strategy. The total gains amounted to around ₹36,502 crore, largely earned from options trading. This was offset by losses in spot and futures trading to the tune of ₹7,687 crore, resulting in the net unlawful gain of ₹4,843.57 crore, which has now been frozen by the regulator. The order directed Jane Street to deposit the impounded amount into an escrow account, with no withdrawals permitted without SEBI’s approval.
The case became more serious after it was revealed that Jane Street continued its trading tactics even after being issued advisories by the National Stock Exchange (NSE) in February 2025. These advisories warned of the firm’s trading behavior and hinted at a regulatory crackdown, yet the firm persisted, prompting SEBI to act firmly.
SEBI invoked multiple provisions under the SEBI Act, including Sections 11(1), 11(4), 11B(1), and 11D, which empower the regulator to issue preventive directions and impound proceeds gained through suspected fraudulent activities. The interim nature of the order means that Jane Street has an opportunity to respond, and it has been granted a 21-day window to file its reply. The firm may also challenge the order before the Securities Appellate Tribunal.
In its initial response, Jane Street denied any wrongdoing and reiterated its commitment to complying with financial regulations in all jurisdictions. It indicated that it would cooperate with SEBI and explore all legal options available.
This development has drawn considerable attention within India’s financial and regulatory circles. India is currently the world’s largest equity derivatives market by volume, and any disruptions in its derivatives ecosystem could have broader implications. Jane Street’s India operations had grown substantially since the firm entered the market in 2020. In 2024 alone, it reportedly generated over $2.3 billion in revenue from Indian markets, signaling the importance of the country in the firm’s global strategy.
SEBI’s action also sends a strong message to both domestic and international players operating in India’s financial markets. The regulator is clearly committed to safeguarding market integrity and is willing to take strong action—even against major foreign entities—if manipulative practices are detected. The order highlights the need for greater oversight on derivatives trading, especially on days when expiry-related volatility can be exploited through high-volume strategies.
Moreover, SEBI’s decision is expected to prompt tighter scrutiny of algorithmic and high-frequency trading practices in India. With the increasing reliance on complex trading algorithms, regulators worldwide are grappling with how to balance innovation with market fairness. This case may well serve as a precedent for future enforcement actions, not only in India but also in other emerging markets seeking to maintain clean and transparent trading environments.
In conclusion, the SEBI order against Jane Street represents a decisive regulatory intervention in defense of market integrity. While the legal and procedural outcomes are yet to unfold, the message is clear: all participants in India’s financial markets, regardless of their size or global reach, must operate within the bounds of law and cannot undermine fair market practices for profit. The case also underscores the importance of robust surveillance and swift regulatory response in maintaining the health and credibility of capital markets.
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