Jane Street Group is pushing back against allegations from India’s securities regulator, Securities And Exchange Board of India (SEBI), which has accused the US based trading firm of market manipulation on Friday. Jane Street described the accusations as “extremely inflammatory” and said it was “beyond disappointed” with SEBI’s interim order accusing the firm of “index manipulation” as per Reuters. The company emphasised that it intends to formally contest the ban.
SEBI Prohibited Jane Street
SEBI barred Jane Street and its related entities, including Jane Street Singapore and JSI Investments, from accessing India’s securities market, citing unlawful gains estimated at Rs 4,843 crore (approximately $550 million). The regulator alleges that Jane Street manipulated Indian bank stocks in a way that triggered substantial payouts on connected derivatives. Specifically, SEBI claims that the firm purchased large amounts of Bank Nifty index constituents, artificially propped up the index during morning trading, and simultaneously built significant short positions in index options—actions that either exercised or expired later the same day.
In response, Jane Street told its employees that SEBI’s claims were based on “many erroneous or unsupported assertions” regarding its trading activity.Trades activity identified by SEBI were simply routine arbitrage activities, a standard and normal practice in the industry.
Regarding the claims that SEBI’s order alleges that Jane Street disregarded warnings from local stock exchanges, the firm firmly rejects this assertion. In an internal memo to employees, Jane Street stated that the regulator’s method for measuring market impact and trading aggressiveness does not align with the practices of how the market operates.
The firm rejected the charges and confirmed it will defend itself against these allegations.
SEBI Increases Surveillance Action
Speaking in Mumbai, few days back, SEBI Chairman Tuhin Kanta Pandey said the regulator is stepping up its surveillance efforts to better detect and prevent manipulation in derivatives trading following this case.
This crackdown reflects SEBI’s increasing focus on maintaining market integrity and addressing complex trading practices that could distort prices and harm investors.
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(With Inputs from Reuters)
