Jane Street representatives to appear before SEBI in September: Report

Jane Street

Representatives from the Jane Street Group are set to appear before market regulator SEBI for a personal hearing in early September, Business Standard reported citing people familiar with the matter.

This will be Jane Street's first in-person interaction with SEBI since the market regulator's crackdown on the firm in July, the report added.

Moneycontrol couldn't independently verify the report.

In an interim order issued on July 3, the Securities and Exchange Board of India (SEBI) had barred the US-based investment firm from buying and selling securities in the Indian market and froze Rs 4,844 crore of its funds.

The market regulator had said that it found Jane Street guilty of manipulating Indian stock market indices by taking bets in cash, and futures and options markets simultaneously to make strong gains. In its order, SEBI detailed that Jane Street could resume trading if an equivalent amount was deposited in an account that gives the regulator rights over the money until its investigation is complete.

Jane Street disputed SEBI's allegations. In a memo to its employees and reported by media, Jane Street noted that said Indian capital market regulator has a “misunderstanding" about a standard hedging practice.

Jane Street told its employees that SEBI made “many erroneous or unsupported assertions” about its trading activity in the country, and the firm intends to defend itself against the accusations including exploiting thin liquidity in the cash and futures segments to manipulate prices.

Later in July, SEBI allowed Jane Street to restart trading in Indian equities after it compiled with a key directive and deposited Rs 4,843.5 crore in an escrow account. Jane Street reportedly sought six more weeks from SEBI to prepare its defence against the market manipulations allegations, after the original deadline lapsed.