MUMBAI (Diya TV) — The Securities and Exchange Board of India (SEBI) has barred U.S.-based global trading firm Jane Street from participating in the Indian securities market. SEBI’s decision follows findings that the firm manipulated Bank Nifty index trades and unlawfully earned ₹4,843.57 crore ($580 million), the largest market manipulation penalty in Indian history.
The SEBI order, issued on July 3, 2025, outlines how Jane Street and its affiliated entities—JSI Investments, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading—engaged in unfair trading practices that misled investors and artificially influenced stock prices.
SEBI’s investigation revealed that Jane Street used a two-phase strategy to manipulate Bank Nifty, an index made up of 12 leading bank stocks. In the first half of the trading session, the firm aggressively purchased large quantities of Bank Nifty constituent stocks and futures. This buying spree supported or pushed up the index’s value, especially on a day when market trends showed a decline.
Later in the day, Jane Street reversed course by selling off the same positions in large volumes. This sudden offloading of stocks and futures dragged prices down. Though the company booked losses on these stock transactions, it made massive gains on options contracts tied to the index.
Jane Street had positioned itself with ₹32,114.96 crore (more than $376 million) worth of bearish trades in Bank Nifty options. These included buying cheap put options and selling expensive call options. As the index fell in the latter half of the day, these trades yielded significant profits, compensating for earlier losses.
SEBI said these actions showed a deliberate attempt to deceive the market. The firm’s strategy manipulated stock prices to benefit its derivative positions, harming retail investors in the process.
According to SEBI, Jane Street used its Indian entities to bypass rules that apply to foreign portfolio investors (FPIs). While FPIs are restricted from trading in the Indian cash market, Jane Street’s domestic presence allowed it to place these trades indirectly.
SEBI stated that Jane Street’s activities had “no economic rationale” other than to manipulate index prices. It also noted that much of the profits were repatriated to offshore accounts.
The regulator ordered the company to transfer the ₹4,843.57 crore ($580 million) in unlawful gains into an escrow account. It also froze the firm’s assets and instructed banks and market institutions not to process any transactions without SEBI’s permission.
SEBI’s findings showed that Jane Street’s manipulation wasn’t limited to Bank Nifty. The firm also traded heavily in Nifty index futures and constituent stock futures. These trades occurred mainly in the final hours of trading sessions, particularly near monthly expiry dates.
Such activity, SEBI explained, directly affected the closing prices of the indices. This, in turn, altered the settlement values of Nifty options, which are based on the final index value. The trading firm’s actions were seen as coordinated and designed to influence the broader market. SEBI cited 21 such instances of manipulative trades in its 100-plus-page order.
The regulator described Jane Street as “not a good faith actor” and said it cannot be trusted in Indian markets. It gave the group 15 days to submit a full list of its Indian assets, including bank accounts, mutual fund holdings, and shares held in physical form. The entities must respond to SEBI’s notice within 21 days of receiving the order.
This case marks one of the most significant enforcement actions SEBI has taken against a foreign trader. It comes after a caution letter sent to Jane Street in February 2025 went unheeded. SEBI said the firm continued manipulative trading patterns even after its warning.
Jane Street, founded in 2000 in New York, operates in over 45 countries. It has more than 3,000 employees and trades across various asset classes. The group’s entities in India are part of its global structure, which includes SEC-registered broker-dealers in the U.S. and affiliates in Europe and Asia.
