The Securities and Exchange Board of India (SEBI) has barred U.S.-based Jane Street Group from accessing India’s securities market, alleging manipulative trading strategies in index derivatives, particularly Bank Nifty and Nifty 50 options, and impounded Rs 4,843.57 crore ($570 million) in alleged unlawful gains. The interim order, issued on July 3, 2025, accuses Jane Street entities, including JSI Investments and Jane Street Singapore Pte, of coordinated trades that artificially influenced index prices, earning Rs 43,289 crore in profits from January 2023 to March 2025. The Alternative Investment Management Association (AIMA) emphasized that predictable regulation and due process are critical to maintaining confidence in India’s booming derivatives market, the world’s largest by contract volume.
SEBI’s 105-page order details how Jane Street allegedly used high-frequency, algorithmic strategies, such as intra-day index manipulation, to inflate indices like Bank Nifty before reversing trades to profit from bearish options positions. For instance, on January 17, 2024, the firm reportedly bought Rs 4,370 crore in Bank Nifty stocks, inflating the index, and earned Rs 734.93 crore in a single day. SEBI claims these actions misled retail investors, who lost Rs 61,000 crore in FY24, while proprietary traders like Jane Street profited significantly. The regulator has frozen Jane Street’s accounts, restricted securities trading, and mandated the deposit of unlawful gains into an escrow account, allowing the firm 21 days to respond or appeal via the Securities Appellate Tribunal.
AIMA’s Kher Sheng Lee said, “SEBI’s transparent, data-driven approach is notable, but predictable regulation and due process are key to sustaining market confidence. India must remain attractive to global investors and technology-driven strategies, as firms like Jane Street provide essential liquidity.” Lee cautioned that overly aggressive enforcement could deter legitimate trading vital for market growth. SEBI countered that its actions are merit-based, proportionate, and aimed at correcting violations without bias, emphasizing retail investor protection amid a market where 93% of retail traders incurred losses, averaging Rs 1.2 lakh each, per a 2024 SEBI study.
Also Read: Sebi Slaps Ban on Jane Street for Alleged Expiry-Day Index Rigging
The ban, effective immediately, has sparked debate. Posts on X, such as from @AlvaApp, note SEBI’s signal against manipulation but highlight liquidity concerns among institutional players. Analysts like Deven Choksey argue the action sets a precedent for market integrity, while others, like @JayneshKasliwal, underscore the scale of Jane Street’s profits.
With India’s derivatives market seeing an 11-fold surge in options premiums since 2020, SEBI’s tightened rules, including higher contract sizes and limited weekly expiries, aim to curb speculation. Jane Street, which earned $2.3 billion in India in 2024, disputes the findings and plans to engage with SEBI, as global firms like Citadel and Optiver also expand in the market.