Jane Street deposits $567mln so it can resume India trading
The Securities and Exchange Board of India (SEBI) barred the firm this month from buying and selling securities in the Indian market and put a freeze on $567 million of its funds. It was only to be allowed to resume trading if an equivalent amount was deposited in an account that gives the regulator rights over the money until its investigation is complete.
SEBI said in a statement on Monday that the money had been transferred and it was examining Jane Street's request that restrictions placed on it be lifted. The company has told its staff it plans to contest SEBI's allegations and that the practices in question were "basic index arbitrage trading".
"The money has been deposited in good faith. The firm continues to contest the order and will send a formal response rebutting the allegations in coming weeks," said the source with direct knowledge of the matter.
It was not immediately clear when Jane Street might resume trading.
The firm does not intend to trade in Indian options while the dispute is unresolved, said a separate source.
The sources were not authorised to speak to media and declined to be identified.
Jane Street did not immediately respond to a Reuters request for comment.
SEBI alleges that Jane Street bought large quantities of constituents in India's Bank Nifty> index in the cash and futures markets to artificially support the index in morning trade, while simultaneously building large short positions in index options which were exercised or allowed to expire later in the day.
The regulator, which tracked Jane Street's trading patterns for more than two years, has also widened its investigation to include other indexes and exchanges, a source has previously said.
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