SEBI Accuses Jane Street of Market Manipulation in Indian Share Market, Seizes ₹4,700 Crore. The company responded by stating it was standard index arbitrage trading and will challenge the ban.
SEBI: The Securities and Exchange Board of India (SEBI), the country's market regulator, has levied serious allegations of market manipulation against Jane Street, a US-based high-frequency trading firm, in the Indian share market. SEBI has imposed a trading ban on the company and seized approximately ₹4,700 crore. In response, Jane Street has stated that their trading activities were part of normal index arbitrage and not any form of manipulation.
Jane Street Responds – We Did Nothing Wrong
In an email sent to its internal team, Jane Street stated that SEBI's ban is unwarranted and that they will challenge it. The company maintains that the trading they engaged in is a standard market practice that balances prices across different instruments.
SEBI's Allegation – Index Intentionally Inflated
SEBI claims that Jane Street purchased a large volume of certain shares in the Bank Nifty index early in the morning and executed trades in their futures to make the index appear higher. Simultaneously, the company profited by taking short positions in options. SEBI alleges that this activity continued for over two years, and investigations are now underway into other indices and exchanges.
Company's Response – We Made Changes, SEBI Did Not Respond
Jane Street stated that they contacted SEBI and exchange officials several times and also made necessary changes to their trading patterns. However, SEBI has not communicated since February. The company claims they answered all questions, but did not receive a response from SEBI.
Increased Scrutiny on the Derivatives Market in India
India's derivatives market has grown rapidly in recent years. By May 2025, India's share in global derivatives trading reached 60%. However, retail investors have also suffered significant losses. In FY2023-24, retail traders incurred losses of ₹1.06 lakh crore. SEBI has stated that it will take strict action against any potential manipulation in this market.
