The Securities and Exchange Board of India (SEBI) has taken a strong stand against US-based trading giant Jane Street Group for unfairly earning thousands of crores from the Indian stock market. SEBI has passed an interim order banning the company from any kind of trading activity in India, citing its involvement in index manipulation and market abuse.
According to SEBI, Jane Street used advanced strategies to unfairly benefit from index derivative trades, especially targeting the Nifty 50 and Bank Nifty options. SEBI has now ordered the seizure of ₹4,843.57 crore, which it says were profits made through illegal and unethical means.
How Jane Street Allegedly Rigged the Market
SEBI’s 105-page order mentions that Jane Street operated in a way that allowed it to earn huge profits in index options while suffering minimal losses in futures and cash segments. This method involved making large positions, especially around the expiry of weekly contracts on the NSE.
The group reportedly made gains of more than ₹36,000 crore in the past two years through index derivatives trading alone. Out of this, over ₹17,000 crore was earned from Bank Nifty options. This formed nearly 40% of its total index options profit in India.
SEBI found that Jane Street’s complex and automated trading system (algo trading) gave it a strong edge over other participants in the market. But the regulator said this edge was misused to disturb fair price discovery and hurt investor confidence.
SEBI Names Four Jane Street Companies in the Order
The SEBI order includes action against four units of Jane Street Group:
- JSI Investment Private Limited
- JSI 2 Investment Private Limited
- Jane Street Singapore Private Limited
- Jane Street Asia Trading Limited
SEBI believes these entities acted together using algorithm-based trading strategies to influence the index movements. The profits gained through such actions were not based on genuine market forces but instead on calculated timing and market positioning.
SEBI Explains the Need for Urgent Intervention
SEBI’s order also states that this matter came to attention after media reports in April 2024 revealed questionable trading patterns. Further investigations showed signs of index manipulation.
The regulator said such actions pose a serious risk to the health of the market. SEBI said it acted quickly to prevent further damage to investor trust and market fairness. The ban and the seizure of money are part of SEBI’s move to send a strong message that it will not tolerate such practices.
Jane Street’s Reaction to SEBI’s Order
Jane Street, in its response, said that it disagrees with SEBI’s interim findings. The company added that it plans to engage with SEBI and explain its side of the story. Jane Street will likely challenge the order legally or seek clarification on SEBI’s investigation process.
The company also claimed that its strategies follow all legal and technical norms in global markets. However, SEBI’s view remains firm that Jane Street took unfair advantage in Indian markets, harming the retail investor ecosystem.
Market Reacts to SEBI’s Ban
Following SEBI’s action, stocks related to the capital market and trading platforms saw a decline. The Nifty Capital Market Index dropped nearly 1.5%. Stocks like Angel One and BSE saw losses between 4% and 5%.
Market experts and observers have supported SEBI’s move. Gurmeet Chadha, a known name in the finance sector, stressed the need for deeper system reforms. He said that such bold action is important to maintain investor confidence and keep the market clean.
How Big is Jane Street’s India Business?
Jane Street’s India operations form about 10% of its global income. In 2024 alone, it earned $230 million from India. Compared to 2023, its income more than doubled.
In the last five years, Jane Street’s India trading volume has grown 11 times. It holds a 2% share in India’s derivatives trading volume. The company is present in 18 countries and is known for its high-speed, technology-driven trading.
Despite this global reputation, SEBI found that Jane Street’s India operations had crossed the line into market abuse. The company’s sharp rise in profits from options trading raised questions, leading to the current investigation.
Jane Street’s Growth Driven by Algo Trading
Jane Street uses algorithmic trading systems that run on its capital. This model allows it to make thousands of trades within seconds, giving it a competitive edge. While this method is legal, the way it was used in India—especially around index expiries—raised red flags for SEBI.
The regulator found that Jane Street’s trading style impacted fair price discovery and gave it an unfair edge against smaller and retail traders.
