India regulator seeks trading data from exchanges in wider Jane Street probe, sources say
The Securities and Exchange Board of India (SEBI) had on July 4 barred Jane Street from trading in Indian markets, alleging the firm manipulated stock indexes through its derivatives positions.
Jane Street has since deposited $567 million in an escrow account, representing what SEBI termed "unlawful gains," in a bid to resume trading while reserving its legal rights. The firm has denied the allegations and called the trades basic arbitrage.
The regulator's latest request, sent to exchanges on July 11, seeks mark-to-market profits, long and short positions of Jane Street group entities, and data for all expiry days of derivatives contracts, the sources said, declining to be named as the discussions are private.
BSE - formerly the Bombay Stock Exchange - has been asked to share data related to its indexes of top 30 stocks and banking stocks, while National Stock Exchange of India (NSE) has been asked for information on indexes tracking the top 50 stocks and financial services firms, they added.
A BSE spokesperson declined to comment. SEBI, NSE, and Jane Street did not immediately respond to Reuters' queries.
"More data is being analysed as part of a planned widening of investigations," one of the sources said, adding that six entities under the banner are being examined currently.
The letter followed a July 10 meeting where SEBI asked exchanges to look for trading patterns similar to those flagged in its interim order, the second source said.
In that order, SEBI had focused on Jane Street's trades in NSE's banking index.
The order said the firm had bought large quantities of stock in constituents of the Bank Nifty (.NSEBANK), opens new tab index, in both the cash and futures markets, during morning trade to artificially support the index, while simultaneously building large short positions in index options.
The firm later reversed the trades to profit from the options, it added.
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