US trading firm Jane Street deposits Rs 4,844 cr in escrow account: Sebi

Business Standard

2 days ago

US trading firm Jane Street has deposited Rs 4,844 crore in an escrow account to comply with the Securities and Exchange Board of India's (Sebi) order on market manipulation, restraining the company from trading in Indian markets, the regulator said on Monday.
The high frequency trading firm has also requested Sebi to lift 'certain conditional restrictions' imposed under the interim order.
Sebi, which has invoked anti-fraud provisions against the trading firm, said it will issue appropriate directions in this regard.
If curbs are eased, Jane Street could return to the Indian market where it is estimated to have made Rs 44,358 crore in equity-options trading between January 2023 and March 2025.
In a 105-page interim order on July 3, Sebi had temporarily barred the HFT titan from trading for allegedly manipulating the popular Bank Nifty index, while ordering the highest-ever impounding of Rs 4,844 crore made 'unlawfully'.
Jane Street has told Sebi that the move to credit the said amount 'has been undertaken by them without prejudice to their rights and remedies which remain available to them in law and equity.'
The New York-headquartered firm is soon expected to file an appeal before the Securities Appellate Tribunal (SAT) against the Sebi order.
Shares of BSE rose nearly 4 per cent following the development. Shares of the only listed equity bourse had crashed 15 per cent following Sebi's ban on Jane Street, which had shaved more than 20 per cent off futures and options (F&O) turnover.
Sources said if Jane Street is once again allowed to access the Indian markets, there will be heightened monitoring on the firm both from Sebi as well as exchanges.
'Sebi remains committed to following due process and ensuring the integrity of the securities market,' the regulator said in a statement.
Jane Street strategy involved aggressively buying the Bank Nifty constituent stocks in both the cash and futures segments, to artificially inflate the index. Later in the day, it offloaded those positions, while holding large short positions in index options, profiting from the index's decline.
Jane Street said these trades were part of a standard 'index arbitrage' strategy, exploiting
price differences between related instruments to provide liquidity and maintain market efficiency. In internal communications, the firm had described Sebi's order as 'extremely inflammatory' and argued that the order disregards the legitimate role of arbitrageurs in modern markets.