Jane Street reacts to SEBI ban, says 'committed to operating in compliance...'

Jane Street reacts to SEBI ban, says 'committed to operating in compliance...'

US trading company Jane Street on July 4 said it disputes the findings of the SEBI interim order barring it from securities market and will further engage with the regulator.

The Securities and Exchange Board of India (SEBI) posted an interim order on its website dated July 3 outlining that Jane Street would no longer be able to participate in the domestic securities market, saying an investigation found it manipulated stock indices through positions taken in derivatives.

The ban will stay in place till a final order on completion of investigations is issued.

Jane Street, in an emailed response to Reuters, said it disputes the findings of the SEBI interim order and will further engage with the regulator. "Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world," the firm said.

JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading of Jane Street Group (JS Group) have been prohibited from the markets.

SEBI also said it would 'impound' Rs 4,840 crore from Jane Street, which it said were the 'unlawful gains earned' from the alleged misconduct.

"Entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly," the SEBI notice said, referring to Jane Street entities.

SEBI, in its 105-page order, alleged that Jane Street and its India incorporated entities took large derivative positions to manipulate the Bank Nifty index, a grouping of 12 financial sector firms and a favourite in the derivative markets.

"This is an unusual case where prima facie, multiple liquid stocks with high retail participation have together been manipulated to facilitate the manipulation of the index options market, resulting in massive profits for the manipulators, at the cost of other participants and retail traders," the order said.

The regulator said that by incorporating entities in India, Jane Street also managed to "work around" Indian regulations that prohibit foreign portfolio investors from undertaking intraday positions in the cash market.

Overall, Jane Street made a profit of Rs 36,500 crore during the examination period between January 2023 and March 2025, SEBI said in its order.

Sebi found the manipulative trading patterns of JS Group early this year. NSE as a first line regulator clearly and explicitly cautioned the JS Group to desist from taking on large risks in the index options markets, and to desist from undertaking trading patterns that raised concerns of manipulative behaviour.

In turn, JS Group themselves represented in February 2025 to NSE of their commitment to adhere to all regulations, the regulator said.

Sebi also noted that JS Group again resorted to undertaking prima facie manipulative 'extended marking the close' trading patterns of large and aggressive intervention in index and constituent markets towards the expiry day closing, so as to influence and manipulate the index to their illegal advantage in May 2025, despite a caution letter in February and its own declarations to the NSE.

"Such egregious behaviour, in clear disregard/ defiance of the explicit advisory issued to them by NSE in February 2025, amply demonstrates that unlike the vast majority of Foreign Portfolio Investors and other market participants, JS Group is not a good faith actor that can be, or deserves to be, trusted.

"In the face of such a strong prima facie case that allowing the JS Group to continue as before may severely compromise investor protection on an extraordinary scale, Sebi has a duty to directly intervene," Sebi's whole time member Ananth Narayan G said in the order.