SEBI prohibits Jane Street, seizes ₹4843 crore for market manipulation

SEBI’s recent move to ban Jane Street and its affiliates from the Indian securities market has caused a stir in the financial world. The regulatory agency took action against the global trading giant over allegations of market manipulation, leading to the impounding of a substantial amount of ₹4,843 crore ($566.71 million) in unlawful gains.

The investigation by SEBI uncovered a manipulative trading pattern employed by Jane Street entities, particularly focusing on expiry days of index options contracts. These actions were alleged to artificially influence prices of key indices like the Nifty and Bank Nifty to reap significant illegal profits. Despite a caution letter issued by the National Stock Exchange (NSE) earlier in February 2025, this activity persisted. As a result of SEBI’s order, Jane Street is barred from engaging in any trading activities, with banks instructed to freeze the firm’s accounts.

In response to the interim order, Jane Street issued a statement refuting SEBI’s findings. The firm expressed its intention to collaborate further with the regulatory body, emphasizing its commitment to regulatory compliance. The ban on Jane Street has immediately impacted the market, leading to a major downturn in the shares of Nuvama Wealth Management, Jane Street’s domestic trading partner. This development serves as a clear indication of SEBI’s heightened watchfulness over the activities of significant foreign institutional players in India’s thriving derivatives market.

SEBI’s bold action against Jane Street underscores its determination to uphold market integrity and fair practices, signaling a zero-tolerance policy towards market manipulation. The impounding of unlawful gains and the restriction on trading activities depict the regulatory body’s proactive stance in maintaining a level playing field for all market participants.

As the financial landscape continues to evolve, regulatory bodies like SEBI play a crucial role in safeguarding the interests of investors and ensuring the smooth functioning of capital markets. By cracking down on instances of market abuse and manipulation, SEBI aims to foster transparency, trust, and confidence in India’s financial ecosystem. The ban on Jane Street serves as a reminder that no entity is above the law, and stringent enforcement measures will be taken to preserve the integrity of the securities market.

While Jane Street has disputed SEBI’s allegations and plans to engage with the regulatory authority, the repercussions of this ban are reverberating across the financial sector. The market impact of SEBI’s decision underscores the significance of robust regulatory oversight in deterring unlawful activities and maintaining a fair and orderly market environment. The ban on Jane Street is a testament to SEBI’s commitment to upholding regulatory standards and ensuring a level playing field for all market participants.