(Bloomberg) — India has temporarily barred Jane Street Group LLC from accessing the local securities market for alleged index manipulation, dealing a severe hit to the US firm that made $4.3 billion in trading gains there in more than two years.<\/p>\n
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The Securities and Exchange Board of India said it would seize 48.4 billion rupees ($570 million) from Jane Street, which it claimed is the total amount of \u201cunlawful gains\u201d made by the firm, according to a 105-page interim order by Ananth Narayan, a board member at the regulator, on its website. Jane Street said it disputes the findings.<\/p>\n
Jane Street is one of the most active foreign players in India, the world\u2019s largest derivatives market by contracts traded, and one that has become a magnet for high-frequency trading firms amid a retail investing boom sparked by the pandemic. SEBI\u2019s order marks a rare instance of such an action against a foreign entity.<\/p>\n
The US-based market maker\u2019s operations in India came under a global spotlight last year after a court battle with Millennium Management revealed it earned $1 billion trading in Indian equity derivatives. Other details disclosed in the case helped trigger SEBI\u2019s investigation, which continued even as the National Stock Exchange of India Ltd. earlier this year closed a separate probe into irregular trades by the firm.<\/p>\n
Jane Street made about 365 billion rupees ($4.3 billion) in overall gain from trading in Indian derivatives and cash market during the period between January 2023 and March 2025, according to the SEBI order.<\/p>\n
\u201cSEBI is sending a message to global HFT giants that you are welcome to trade here but if you undertake unfair practices then we also hold a stick,\u201d said Tejas Shah, head of derivatives trading at Equirus Securities Pvt. \u201cI would expect some temporary impact on volumes as other HFTs sit back a little.\u201d<\/p>\n
Shares of Nuvama Wealth Management Ltd., Jane Street\u2019s local trading partner, plunged 11% in Mumbai trading, the most in three months. India\u2019s benchmark NSE Nifty 50 Index was little changed while a broader gauge of Asian equities fell 0.3%.<\/p>\n
SEBI alleged that on weekly index options expiry days, Jane Street used a large amount of funds to influence price action in the futures as well as the cash market \u2014 where volumes are relatively low. That allowed it \u201cto put on significantly larger and profitable positions in the highly liquid index options market by misleading and enticing a large number of smaller individual traders.\u201d<\/p>\n
Story Continues <\/p>\n
The regulator had warned Jane Street to avoid such trading practices as early as January this year, according to a person familiar with the matter, who asked not to be identified discussing private information. The investigation found that the trading strategy continued to be used in May, the person said.<\/p>\n
Curbs Imposed<\/p>\n
Pending detailed investigation, Jane Street Group entities are immediately \u201crestrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly,\u201d SEBI said. Banks have been directed to ensure no debits are made without SEBI\u2019s permission in respect of the accounts held individually or jointly by the entities, according to the interim order.<\/p>\n
SEBI also said the restrictions can be lifted if Jane Street deposits the said amount in an escrow account at a designated bank in India.<\/p>\n
Jane Street disputes the findings of the SEBI interim order and will further engage with the regulator, a representative for the US-based market maker said in a statement. SEBI said the firm can contest the regulator\u2019s \u201cprima facie observations\u201d within 21 days of the receipt of the order.<\/p>\n
\u201cThis may signal SEBI\u2019s growing vigilance and willingness to assert control over foreign institutional activity making hefty gains in its derivatives market \u2014particularly where such strategies blur the line between smart trading and market distortion,\u201d said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.<\/p>\n
Derivatives Boom<\/p>\n
Global high-frequency trading and market-making firms from Ken Griffin\u2019s Citadel Securities LLC to Optiver have rushed to expand operations in India in recent years as the retail investor-led boom saw options premiums surge 11-fold in the five years to March 2025.<\/p>\n
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The retail frenzy has helped foreign funds and local proprietary firms that use algorithms as they pocketed $7 billion in gross profits in the 12 months ended in March 2024, according to a SEBI study. Retail investors, meanwhile, lost an equivalent of $21 billion from trading futures and options in the three years to March 2024., according to the regulator.<\/p>\n
To protect them, SEBI has since November imposed several restrictions on trading options including higher minimum investment limits and an increase in lot sizes to protect retail traders. The measures have helped cool trading this year.<\/p>\n
The regulator\u2019s action \u201cwill also create a level playing field for everyone especially the local players who were losing a lot of money,\u201d said Shah of Equirus.<\/p>\n
SEBI also directed Jane Street entities to close out or square off any open positions they may have in exchange-traded derivative contracts within three months from the date of order or at the expiry of such contracts, whichever is earlier.<\/p>\n
Jane Street is \u201ccommitted to operating in compliance with all regulations\u201d in the regions it operates in around the world, the firm said in its statement.<\/p>\n
\u201cThis is a good move by SEBI, but we need more corrective measures to protect market integrity,\u201d said Deven Choksey, managing director at DRChoksey FinServ Pvt. \u201cMechanisms like Algos, HFTs are creating inequalities in the markets. Institutions have an edge.\u201d<\/p>\n
–With assistance from Lianting Tu, Kurt Schussler, Alex Gabriel Simon, Ashutosh Joshi, Ruchi Bhatia, Russell Ward and Naman Tandon.<\/p>\n
(Updates prices in the seventh paragraph. An earlier version was corrected to say that trading gains were made over a period of more than two years.)<\/p>\n
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\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — India has temporarily barred Jane Street Group LLC from accessing the local securities market for alleged…\n","protected":false},"author":3,"featured_media":38827,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[3638,64,31194,31191,79,1567,31192,30622,31193,30624,67,132,68],"class_list":{"0":"post-38826","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bloomberg","9":"tag-business","10":"tag-derivatives","11":"tag-derivatives-market","12":"tag-economy","13":"tag-india","14":"tag-interim-order","15":"tag-jane-street","16":"tag-sebi","17":"tag-securities-market","18":"tag-united-states","19":"tag-unitedstates","20":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114796596221643846","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/38826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=38826"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/38826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/38827"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=38826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=38826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=38826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}