Jane Street Group LLC, a prominent U.S. proprietary trading firm, has been temporarily barred from India’s securities market following accusations of index manipulation by the Securities and Exchange Board of India (SEBI). The regulator’s interim order, issued on July 3, claims Jane Street amassed ₹48.4 billion ($564 million) in unlawful gains through manipulative trading in the Nifty Bank Index between January 2023 and March 2025. SEBI alleges the firm engaged in intra-day price manipulation and aggressive trades on expiry days to profit from options positions, disregarding advisories from the National Stock Exchange (NSE).
Jane Street, in an email to employees, strongly refuted SEBI’s claims, describing them as “erroneous” and “fundamentally mistaken.” The firm asserts its trades were standard index arbitrage, aligning prices between options and stock markets, and denies any wrongdoing. Following NSE letters in February 2025, senior leaders from Hong Kong and New York met with exchange officials in Mumbai, adjusting trading practices to comply. Jane Street claims SEBI rebuffed its attempts at dialogue since August 2024 and is preparing a formal response while exploring legal options, including an appeal to the Securities Appellate Tribunal.
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The dispute highlights tensions in India’s booming derivatives market, where proprietary traders like Jane Street account for nearly half of options trading volume. SEBI’s crackdown aims to protect retail investors, who lost ₹610 billion in FY 2024. The ban has already impacted market dynamics, with shares of Jane Street’s local partner, Nuvama Wealth Management, falling 11%. The resolution of this case could shape regulatory oversight of high-frequency trading in India.
