Could Jane Street be allowed to trade the patterns it used earlier again?

The July 3 order had directed Jane Street to deposit the amount it described as unlawful gains into an escrow account.

In a release issued Monday morning, the Securities and Exchange Board of India (Sebi) confirmed Moneycontrol’s exclusive that Jane Street has deposited Rs 4,843.5 crore in an escrow account, in compliance with the regulator’s interim order dated July 3.

Sebi further revealed that Jane Street has submitted a request seeking the removal of “certain conditional restrictions imposed under the interim order” and asked the regulator to issue appropriate directions in this regard. Sebi said this request “is currently under examination by SEBI in accordance with the directions of the interim order.”

The July 3 order had directed Jane Street to deposit the amount it described as unlawful gains into an escrow account. It also clearly stated that various restrictions—including those restraining the firm from transacting in securities under Clause 62.2—would cease upon successful deposit of these gains. Related directives issued to banks, depositories, custodians, registrars, and transfer agents would also be lifted.

However, what exactly Jane Street is seeking in terms of future trading activity, and what Sebi is currently evaluating, remains unclear.

Also read: Back in the game: Jane Street deposits Rs 4,843.5 crore as directed by Sebi, can trade again

The only continuing restriction under the order pertains to manipulative trading practices and the specific patterns of trading referenced in the order. The order directs that: “Entities shall cease and desist from directly or indirectly engaging in any fraudulent, manipulative or unfair trade practice or undertaking any activity, either directly or indirectly, that may be in breach of extant regulations including by dealing in securities using any of the patterns identified or alluded to in this order.”

Besides, stock exchanges were also directed to monitor trades by Jane Street entities. "Stock exchanges have been directed to closely monitor all future dealings and positions of the Jane Street Group on an ongoing basis, to ensure that the entities do not, directly or indirectly, engage in any form of manipulative activity — including trading in securities using any of the patterns identified or referred to in this order — until SEBI completes its investigation and any consequent proceedings."

Moneycontrol has reached out to Sebi seeking clarification on the nature of the restrictions currently under examination. The story will be updated once a response is received.