Jane Street Banned in India LIVE Updates: BSE, other capital market stocks take a hit; all you need to know
As per a PTI report, this could be the highest disgorgement amount ever directed by the Securities and Exchange Board of India (SEBI). What is Jane Street?
Jane Street Group was established in 2000 as a global proprietary trading firm in the financial services industry. According to the company's website, it has more than 3000 employees across five global offices. We trade a broad range of asset classes on more than 200 venues in 45 countries. What did SEBI order say?
In its interim order, the regulator has debarred JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading, entities collectively referred to as the Jane Street Group, from trading until further notice, while continuing its investigation.
The Jane Street Group has come under Sebi's scrutiny for allegedly manipulating index levels in the stock market to earn illegal profits, primarily through the highly liquid Bank Nifty and Nifty index options segments.
Follow updates here:
04 Jul 2025, 02:48 PM IST
The capital market stocks fell today after SEBI barred US trading firm Jane Street from the Indian stock market over alleged manipulation in derivatives trading. Angel One slumped 6%. BSE share price was down 6.4% and Central Depository Services (India) fell 3.5%. Nuvama Wealth Management, which is Jane Street's India trading partner, fell more than 9%.
04 Jul 2025, 02:40 PM IST
SEBI, in its 105-page order, accused Jane Street of manipulating the Bank Nifty index—an index made up of 12 top financial stocks and popular in derivatives trading.
According to SEBI, Jane Street followed two key trading strategies over more than two years that were designed to unfairly move the index.
Here's how it worked:
In the morning, Jane Street would buy large amounts of Bank Nifty stocks and futures to artificially push up the index.
At the same time, they were placing big bets against the index using options.
Later in the day, they would reverse their trades—selling what they bought earlier—to drive the index back down and profit from the drop.
SEBI said this created a false sense of market activity, tricking other traders into buying or selling at misleading price levels.
On days when Bank Nifty options expired, Jane Street also made large, focused trades near market close, which SEBI says was an attempt to influence the final price of the index in their favour.
04 Jul 2025, 02:21 PM IST
Market regulator banned US-based trading firm Jane Street from operating in the Indian stock market, accusing it of manipulating stock indices through its trades in the derivatives segment. In what is SEBI's toughest action yet against a foreign firm, the regulator said in an order on July 3 that Jane Street and its related companies are no longer allowed to trade in India. SEBI also seized ₹ 4,843 crore from the firm, calling it illegal profits made through the alleged manipulation.
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This is likely the largest amount thus impounded by the regulator till entities tied to Jane Street Group (JS Group)—JSI Investments, JSI2 Investments, Jane Street Singapore and Jane Street Asia Trading —have been prohibited from dealing in securities, directly or Street has 21 days to file a response.'JS Group is not a good faith actor that can be, or deserves to be, trusted,' Sebi whole-time member Ananth Narayan said in his 105-page, ex-parte, interim order issued on July 3. 'The integrity of the market, and the faith of millions of small investors and traders, can no longer be held hostage to the machinations of such an untrustworthy actor.'The firm disputed the findings of the Sebi interim order and said it will engage with the regulator on the matter. 'Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world,' the company spokesperson said in an emailed regulator examined Jane Street's trades in India between January 1, 2023, and March 31, 2025. During this period, it made over ₹43,289 crore ($5.07 billion) profit in index options and ₹7,687 crore ($900 million) in losses across stock futures, index futures and cash markets on the in New York in 2000, Jane Street is a prominent quantitative trading firm with offices in all the key financial centres of the world. It uses complex algorithms developed in-house to execute high-frequency regulator's finding is that the NSE's Bank Nifty Index —comprising the stocks of India's top dozen lenders—had prima facie been manipulated in a complex and illegal manner aided by the JS Group's immense trading, financial and technological prowess. Jane Street would drive up prices with heavy buying in the morning and send them down through a selling spree later in the day, according to Sebi. It also sought to push index levels down with heavy sell orders close to the option expiry, the regulator found that the Bank Nifty options alone contributed Rs 17,319 crore, amounting to 40% of the total index option's profits.'This is an unusual case where prima facie, multiple liquid stocks with high retail participation have together been manipulated to facilitate the manipulation of the index options market, resulting in massive profits for the manipulators, at the cost of other participants and retail traders,' Sebi said.A detailed investigation is still underway. It would cover other major stock indexes including NSE's Nifty.'It is important to note, however, that this examination has so far been limited to select high-profit expiry days in the Bank Nifty index. There may exist similar patterns in other indices or trading behaviours reflecting alternate strategies which have not yet been analysed. Accordingly, many more trading days may merit detailed investigation to assess the full scope and recurrence of such conduct,' Sebi said in its regulator found at least 15 instances of the JS Group undertaking large and aggressive trades in the underlying Bank Nifty component stocks and futures that wasn't for investment or for any standalone economic rationale. In fact, it said, given the sheer size and aggressive nature of the intervention in cash and futures markets and the immediate reversal the same day, the standalone trades in the cash and futures were more likely to end up showing a large net loss.'These trades were undertaken only to distort Bank Nifty index option prices in the interim and entice market participants in Bank Nifty index options to trade at such distorted levels, while the JS Group would take advantage of this and run much larger opposite side positions in the index options market,' Sebi Street, in an August 30, 2024, letter to Sebi, had argued that these trades were to 'remove unwanted delta' or to 'manage overall delta.'The regulator didn't accept these statements. 'JS Group was undertaking an intentional, well-planned, and sinister scheme and artifice to manipulate cash and futures markets and hence manipulate the Bank Nifty index level, to entice small investors to trade at unfavourable and misleading prices, and to the advantage of the JS Group,' it said. The regulator alleged that the Jane Street Group appeared to be most active on expiry days of index said that by incorporating entities in India, JS Group also managed to 'work around' foreign portfolio investor (FPI) regulations that prohibit such overseas entities from undertaking intraday cash market transactions.'Thereby (Jane Street executed) the manipulative scheme without specifically flouting the FPI regulations," it of the 11,219 FPIs registered with Sebi as of March 31, 2024, only 2.5% are engaged in algorithmic trading, as per regulatory data. JS Group is part of this short-term, algorithmic trading aggressive dumping of Bank Nifty component stocks and futures in sharp reversal of the heavy pumping purchases done in the morning was immensely profitable for the large Bank Nifty option positions being run by the JS Group, and to the detriment of all those that had traded in the morning against JS Group at artificially boosted prices, Sebi said. This was a classic case of 'marking-the-close,' where an entity with huge options exposures that are expiring shortly, is moving the underlying market aggressively in its favour, Sebi Kamath, the founder of discount broker Zerodha, posted on X: 'You've got to hand it to Sebi for going after Jane Street. If the allegations are true, it's blatant market manipulation. The shocking part? They kept at it even after receiving warnings from the exchanges.'He also highlighted that such firms are key to the derivatives market.'Prop trading firms like Jane Street account for nearly 50% of options trading volumes. If they pull back— which seems likely —retail activity (~35%) could take a hit too. So this could be bad news for both exchanges and brokers,' Kamath posted.
