Global high frequency trading major Jane Street, which is planning to challenge the SEBI order banning it from the Indian markets, is unlikely to get an immediate relief though an appeal could lead to a time bound final order being passed by the regulator, say legal experts.
Lawyers specialising in securities market matters further add that since the Securities and Exchange Board of India (SEBI) has passed an interim order, the Securities Appellate Tribunal (SAT) could, without providing any kind of stay order, direct the regulator to pass a final order within a specified period.
SAT is the designated tribunal to appeal against orders issued by the capital market regulator.
“At the appeal stage, the first outcome could be a direction to SEBI for a time bound disposal in the form of a final order,” said Jayesh H, co-founder, Juris Corp Advocates & Solicitors.
“It is highly unlikely that the order is completely set aside as even the Supreme Court has ruled that SEBI has powers to issue interim ex-parte orders in instances where there is market wide ramifications and irrevocable damage could be done if SEBI were to not issue such orders,” he added.
In an order issued on Friday last week, SEBI banned Jane Street and its India arms from trading in Indian securities, and sought to impound Rs 4,843.5 crore in alleged unlawful gains linked to expiry-day manipulation using cash and futures trades to distort options pricing. As per SEBI, Jane Street made a profit of Rs 36,671 crore between January 2023 and March 2025.
“Matters related to market manipulation are tricky ones and at this stage, SEBI only has to show ‘enough’ to convince the tribunal that something wrong has happened and it is working towards final disposal of the matter,” said another lawyer on conditions of anonymity.
“There have been instances in the past when SAT has directed SEBI to issue a final order while giving a specified period of time and also giving the affected party an opportunity to present their case in front of the regulator. It is highly likely that the same logic would be applied to this matter as well,” he added.
Incidentally, SEBI in its order has emphasised on the allegations related to market manipulation and fraudulent trades. The order states that Jane Street resorted to undertaking prima facie manipulative ‘extended marking the close’ trading pattern on the index and constituent stocks towards the close on expiry day, so as to influence and manipulate the index for illegal advantage.
Meanwhile, Sumit Agrawal, Founder, Regstreet Law Advisors and a former legal officer of SEBI, is of the view that while the interim order is rich in detail and reflects SEBI’s broader concerns about trading behaviour around derivatives expiry, the legal threshold for proving market manipulation under Indian law is quite high.
“The order leans significantly on circumstantial indicators like timing and market impact, but absent clear evidence of intent or artificial price creation, those arguments may not be legally decisive,” says Agrawal.
Jane Street, on its part, has already disputed the allegations in SEBI’s interim order, and has communicated to its staff that it will challenge the regulatory ban.
In a communique to its employees, it said that the trades under question were “basic index arbitrage trading”, adding that it was “beyond disappointed” by what it called “extremely inflammatory” accusations by SEBI, and is working on a formal response.
“Jane Street may argue that its actions formed part of a legitimate, rule-based trading model designed for hedging or liquidity management. It could also point to the transparent execution of trades via the exchange, and stress the lack of intent to mislead or cause artificial price movement. Additionally, there may be questions raised about procedural fairness, given the ex-parte nature of the order,” said Agrawal while adding that if the global high frequency trading major can establish that the trading was lawful and not intended to distort the market, relief from SAT is certainly within the realm of possibility.
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