Jane Street Group, a major global proprietary trading firm, has been barred from accessing Indian securities markets after the Securities and Exchange Board of India, the Indian market regulator, issued an interim order alleging manipulation of benchmark indices, including the Nifty 50.
What Happened: SEBI has frozen more than INR 48.43 billion ($580 million) in alleged unlawful gains and directed Jane Street’s entities to deposit the amount in an escrow account, pending further investigation.
The order on Thursday accuses Jane Street’s Indian and foreign subsidiaries of deploying complex trading strategies to manipulate index levels on expiry days, particularly in the highly liquid Nifty 50 and Bank Nifty options markets.
SEBI’s investigation found that Jane Street’s entities engaged in aggressive, high-volume trades in index constituent stocks and futures, both to artificially move index prices and to profit from large, directional options positions.
The regulator cited “intra-day index manipulation” and “extended marking the close” strategies, where Jane Street allegedly bought or sold large quantities of underlying stocks and futures to influence the index settlement price, then reversed those trades to maximize options profits.
Jane Street Group did not immediately respond to Benzinga‘s request for comment.
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Why It Matters: SEBI’s order highlights that Jane Street’s trading activity was concentrated around expiry days, with the group running the largest cash-equivalent risks in index options.
The regulator noted that these actions created a false or misleading appearance of market activity, violating India’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations. The order also points to a disregard for regulatory warnings, as Jane Street continued similar trading patterns even after receiving a caution letter in February.
The ban and asset freeze are interim measures, and SEBI’s investigation is ongoing.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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