Latest news with #JaneStreetGroup
Business Standard
2 days ago
- Business
- Business Standard
Jane Street to resume trading in India after complying with SEBI's escrow requirement
Global trading giant Jane Street Group is set to resume its activities in Indian markets after complying with key conditions laid out by the Securities and Exchange Board of India (SEBI) in its interim order on alleged index manipulation. According to an official SEBI statement released on Monday, Jane Street has deposited Rs 4,843.57 crore into an escrow account as directed in SEBI's July 3 interim order. The deposit fulfills a crucial requirement that previously led to trading restrictions against the firm for its alleged use of manipulative strategies in Indian stock markets. Upon compliance with the escrow requirement, several interim trading restrictions on Jane Street have been lifted. This effectively means that Jane Street, which has denied any wrongdoing, can now resume trading activities in the country. However, the reprieve comes with a stern warning. SEBI's latest communication emphasizes that Jane Street must refrain from any direct or indirect engagement in manipulative or unfair trade practices. This includes avoiding the use of any trading patterns flagged in the July 3 order. Jane Street has reportedly confirmed its intent to comply. In addition, stock exchanges have been instructed to keep a close watch on Jane Streets positions and trading behavior. As per Paragraph 62.13, exchanges are expected to ensure that the firm steers clear of any activity that could be seen as manipulative, at least until SEBI's full investigation concludes and a final order is passed. The regulator has explained the reasoning behind its directions under the 'Balance of Convenience' section of the order, specifically in paragraphs 59 through 61. While Jane Street is now back in action in the Indian market, the shadow of ongoing scrutiny and regulatory oversight looms large. SEBI reaffirmed its commitment to due process and market integrity in the release.
News18
2 days ago
- Business
- News18
SEBI Allows Jane Street's Return To Indian Markets With Conditions
But the respite that comes for Jane Street comes with some conditions and terms. SEBI has told the exchanges, BSE and NSE, to keep a strict surveillance on Jane Street Group's future dealings and positions to ensure that they won't indulge in any kind of manipulative activity till the completion of its investigation. 'Exchanges have confirmed that they will comply with this," Sebi said in a statement on Monday. SEBI also directed Jane Street group to not make any debits in respect of assets without the prior approval of SEBI. Moreover, the market regulator directed the banks where Jane Street affiliates are holding bank accounts to ensure no debits were made without permission of SEBI, according to ET report. Jane Street, as per Et report, said in the undertaking that it will not enter into options trading. Moreover, the group won't trade in the cash segment until it has explained its trading strategies to SEBI. Earlier this month, the markets regulator in an interim order had barred the Jane Street Group from participating in Indian securities markets. Sebi had banned the Jane Street entities from trading or accessing Indian markets, frozen an amount of Rs 4,843 crore, and given the group 21 days to respond or request a hearing. Founded in 2000, Jane Street is a US-based leading global trading firm that operates as a proprietary trading company. Unlike hedge funds, Jane Street trades using its own capital. It has operations across the US, Europe, and Asia, specialising in high-frequency trading and algorithmic strategies. The firm has over 2,600 employees and is known for its sophisticated quantitative models and automated market-making systems. In India, it operated through four firms — JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.
Time of India
2 days ago
- Business
- Time of India
MCX, BSE shares in focus as Sebi lifts trading ban on Jane Street with conditions
Shares of Multi Commodity Exchange ( MCX ) and BSE Ltd are likely to remain in focus on Tuesday, July 22, after the Securities and Exchange Board of India ( SEBI ) lifted the trading ban on Jane Street with conditions. The market regulator announced that Jane Street Group can resume trading in Indian securities after fulfilling compliance requirements, ending the trading suspension imposed earlier this month. Explore courses from Top Institutes in Select a Course Category CXO Digital Marketing Finance others PGDM healthcare Cybersecurity Data Analytics Data Science Degree Design Thinking Management Public Policy Project Management Data Science MBA Operations Management Healthcare Artificial Intelligence Others MCA Leadership Technology Product Management Skills you'll gain: Operations Strategy for Business Excellence Organizational Transformation Corporate Communication & Crisis Management Capstone Project Presentation Duration: 11 Months IIM Lucknow Chief Operations Officer Programme Starts on Jun 30, 2024 Get Details Skills you'll gain: Technology Strategy & Innovation Emerging Technologies & Digital Transformation Leadership in Technology Management Cybersecurity & Risk Management Duration: 24 Weeks Indian School of Business ISB Chief Technology Officer Starts on Jun 28, 2024 Get Details Skills you'll gain: Customer-Centricity & Brand Strategy Product Marketing, Distribution, & Analytics Digital Strategies & Innovation Skills Leadership Insights & AI Integration Expertise Duration: 10 Months IIM Kozhikode IIMK Chief Marketing and Growth Officer Starts on Apr 7, 2024 Get Details Skills you'll gain: Digital Strategy Development Expertise Emerging Technologies & Digital Trends Data-driven Decision Making Leadership in the Digital Age Duration: 40 Weeks Indian School of Business ISB Chief Digital Officer Starts on Jun 30, 2024 Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Top 25 Most Beautiful Women In The World Articles Vally Sebi, in its statement on Monday, said it had directed stock exchanges to closely monitor the future dealings and positions of Jane Street Group on an ongoing basis to ensure that the firm does not engage in any manipulative activity until the conclusion of the ongoing investigation. SEBI confirmed that exchanges have assured compliance with these directions. The relief came after Jane Street deposited Rs 4,844 crore in an escrow account , with a lien marked in favour of Sebi, to comply with the regulator's conditions. Sebi noted that upon the creation of this escrow account, the directions stipulated in the interim order dated July 3 shall cease to apply. Live Events In a communication to its staff shortly after the trading restrictions were imposed, Jane Street had said that Sebi's interim order reflected a misunderstanding of standard hedging practices and the interrelationships between derivatives and underlying markets. The firm also contested Sebi's claims that its activities were "prima facie manipulative," stating that the regulator had overlooked the role of liquidity providers and arbitrageurs in the market. The interim order had barred Jane Street from trading in Indian markets after Sebi alleged the firm engaged in manipulation in the local derivatives market. Sebi's order stipulated that the lifting of the ban is conditional upon Jane Street maintaining the Rs 4,844 crore escrow account and complying with all regulatory requirements. Meanwhile, exchanges have been tasked to maintain strict oversight of Jane Street's trading activities to prevent any market misconduct. Also read: Beyond 1:1 bonus issue, why HDFC Bank shares remain top pick after Q1 results ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Bloomberg
3 days ago
- Business
- Bloomberg
India's SEBI Allows Jane Street to Resume Trading, Report Says
India's securities regulator has allowed Jane Street Group to resume trading in the country's stock market after the firm deposited 48.4 billion rupees ($564 million) in alleged 'unlawful gains' into an escrow account, the Business Standard reported Monday, citing people it didn't identify. The Securities and Exchange Board of India informed Jane Street in an email last week that the trading ban had been lifted, according to the report. Officials at SEBI and Jane Street didn't respond to Business Standard's request for comment.
Al Jazeera
6 days ago
- Business
- Al Jazeera
India's ban on Jane Street raises concerns over regulator role
Indian tax authorities and market regulator are considering widening their probe of United States trading giant Jane Street Group to investigate it for tax evasion in addition to an earlier charge of price rigging in the Bombay Stock Exchange's benchmark Sensex, according to media reports. The tax evasion charge comes on the heels of market regulator, the Securities and Exchange Board of India (SEBI), seizing 48.43 billion rupees ($570m) and banning four Jane Street-related entities from operating in the market for alleged price manipulation in the National Stock Exchange (NSE). SEBI's order has roiled the Indian markets, raising questions about regulator surveillance and investor protection in the world's largest options trading market. Trading in India's weekly equity index options has slumped by a third on the ban on Jane Street, the Reuters news agency reported on Thursday. Trading of equity options lets investors buy or sell a stock at a predetermined price and date. As the Indian market rapidly grew to handle more than half of all global options trades, retail investors entered the market too. Questions of price manipulation have dogged this rapid rise but remained vacuous until a New York court case in April 2024, where Jane Street alleged that its rival, Millennium Partners, had stolen its algorithms that helped it make in the Indian options market. A whistleblower, Mayank Bansal, then made presentations to SEBI showing Jane Street's trading patterns. Bansal had agreed to speak to Al Jazeera about his interaction with SEBI on the matter, but then backtracked. On July 3, in a detailed interim order, the regulator said that 'by preponderance of probability, there is no economic rationale that can account for this sudden burst of large and aggressive activity … other than the intent to manipulate the price of securities and index benchmark'. SEBI has alleged that Jane Street accumulated large long positions in stocks that are a part of the NSE's Bank Index and built large short positions in index options at the start of trade. Around market closing time, it would reverse its trades in the cash and futures segments, pushing down the index and earning large profits in the options segment. This activity was blurred by its offshore entities making some of these trades. 'Lawyers [can] push back with SEBI on jurisdiction-related issues, but when underlying [Indian] securities are issued, SEBI can take action,' Joby Mathew, managing partner at the law firm Joby Mathew and Associates and a former legal officer at SEBI, told Al Jazeera. Jane Street has disputed SEBI's findings and has hired lawyers to represent it before SEBI in the case. It has deposited the 48.43 billion rupees ($563m) of allegedly ill-gotten gains in an account pending the investigation and final report. 'Such processes typically take eight to 24 months,' especially in 'complex manipulation cases', Sumit Agarwal, a former SEBI officer and cofounder of Regstreet Law Advisors, told Al Jazeera in an emailed response. But the investigation can only be part of a broader questioning of Jane Street and the regulator's role in identifying and curbing such trades sooner and protecting retail investors. 'Highly speculative and volatile' As India's options market grew, retail investors were drawn to it, enticed by the growing volumes, the prospect of quick gains and less fettered trades than the equities market, where a rapidly rising stock could hit circuit breakers, leading to a halt in trading to prevent manipulation. Mathew says his clients from the options trading segment range from students to award-winning cardiologists who may not have a refined knowledge of the market but were sold on the idea by traders or social media influencers. Most ended up losing money. Deven Choksey, managing director at the Mumbai-based stock brokerage KR Choksey Shares and Securities, says retail investors form nearly half the Indian options market, while Jane Street and other sophisticated institutions form a little more. 'It's like a bullock cart facing a race car. Their meeting is bound to cause accidents.' If Jane Street is found to have manipulated the market, its earnings would have come through losses for retail investors. Bhargavi Zaveri, a financial regulations researcher formerly at the National Institute of Public Finance and Policy and currently a doctoral researcher at the National University of Singapore, says retail investors have made losses in the options segment, but the total amount is not clear. Identifying and compensating investors can be hard in such cases. So even if the final order goes against Jane Street and the 48.43 billion rupees fine goes into an investor protection fund, it may be hard to distribute it onwards to retail investors who incurred losses. The best protection may be to stem irregular trades early, experts say. 'SEBI has a surveillance system and they can well monitor the markets in a timely way.,' says Choksey. SEBI's interim order is based on trades made by Jane Street between January 1, 2023 and March 31, 2025, a period in which retail investors may have incurred substantial losses, going by SEBI's estimates. Regstreet's Agarwal says, 'SEBI's own 2024 consultations flagged expiry day options as highly speculative and volatile.' India has fortnightly expiry dates for options, which is when they have to be settled. That is when Jane Street allegedly manipulated prices. In a February 6 letter, SEBI told Jane Street, 'The above trading activity prima facie appears to be fraudulent and manipulative.' But it did not issue its order curbing Jane Street until July 3. SEBI's recent measures limiting weekly expiries, tightening spreads and higher margins 'reflect a push for greater protection' for retail investors, Agarwal says. But the best way to protect retail investors would be to have them trade separately from proprietary trading firms in the options segment, Choksey points out. 'India is unique … and in no market will you see so many retail investors. So, SEBI must create product differentiation by customer segment.' to protect retail investors Chiksey says. Challenges in proving manipulation In an internal email, Jane Street reportedly told employees it was using 'basic index arbitrage trading' and called SEBI's allegations 'extremely inflammatory'. It has hired Mumbai-based law firm, Khaitan and Co, to represent it before SEBI. Proving price manipulation involves showing intent, which can be hard, and experts are divided on whether a SEBI investigation will be able to demonstrate that. 'Trading to incur losses makes no sense, and so it indicates manipulation,' says Mathew, the former legal officer. But NUS's Zaveri says it is not so clear. 'I think three problems are being conflated here. One, the size of the options segment being manifold the underlying cash segment. Two, that retail investors have made losses on the options segment, which I'm not sure have been quantified. Three, Jane Street arbitraged between an illiquid cash and highly liquid options segment.' According to her, the three occurrences may not prove the intent to manipulate. Under Indian law, proving manipulation is challenging and 'Jane Street can argue its expiry day trades were legitimate index arbitrage recognised by regulators, making a manipulation finding difficult without clear intent evidence,' Regstreet's Agarwal says. Any action by SEBI could affect Jane Street's reputation. Last month, an investigation by Bloomberg found that Jane Street cofounder Robert Granieri was duped into funding weapons for an attempted coup to overthrow the government in South Sudan. If SEBI's final order lays out any action against Jane Street, 'they may well have to disclose it in their filings, which will affect them elsewhere in the world', says Mathew.
