SEBI Chairperson warns against market manipulation: ‘Won’t tolerate it’

SEBI Chairperson Tuhin Kanta Pandey has issued a stern warning against market manipulation, emphasizing the regulator’s zero-tolerance policy towards such illegal practices. This statement came in light of the recent decision to ban US trading entity Jane Street and its affiliated entities from participating in the market activities. The SEBI chief underscored the importance of maintaining transparency in disclosing related party transactions, addressing conflicts of interest, and promptly reporting material developments. These responsibilities, according to Pandey, are essential for ensuring robust corporate governance practices and preventing market abuse.

Speaking at an event organized by the Bombay Chartered Accountants Society, Pandey emphasized that compliance with regulatory norms should not be reduced to a mere checklist but should be approached with a focus on efficiency. He highlighted the need to strike a balance between compliance requirements and operational effectiveness, stressing the importance of achieving better outcomes with minimal compliance burdens. The SEBI chief reaffirmed the regulator’s commitment to thwarting market manipulation and enhancing surveillance mechanisms to detect and deter such illicit activities effectively.

SEBI’s action to bar Jane Street and its related entities from accessing the market followed allegations of illegal gains amounting to Rs 4,843.5 crore made through trading in index options on Indian exchanges. The regulator directed these entities to deposit the illicit gains in a specified account and froze their bank accounts to prevent further misuse. The enforcement action applies to all Jane Street Group entities operating in India, restricting their participation in market-related activities.

In response to SEBI’s interim order, Jane Street has refuted the findings and expressed its intention to engage further with the regulator. The US trading entity has contested the allegations leveled against it and aims to resolve the matter through ongoing discussions with SEBI. Nevertheless, the regulator remains steadfast in its commitment to upholding market integrity and protecting investors from fraudulent practices. The recent measures taken by SEBI signal a proactive stance against market manipulation and underscore the importance of regulatory vigilance in preserving the integrity of India’s capital markets.