Jane Street guys are brilliant mathematicians, but we can have PhDs too: Sebi chief
(
Sebi
) Chair
Tuhin Kanta Pandey
has said that the regulator is capable of matching the expertise of sophisticated global traders, and pushed back against criticism of its probe into U.S. trading firm
Jane Street
, according to a report.
'I know these guys are brilliant mathematicians and PhDs, but we can have PhDs from our side. We are not constrained,' Pandey told The Financial Times.
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Pandey also rejected Jane Street's defence that it was engaged in standard
index arbitrage
. 'Manipulation is where you are artificially creating arbitrage,' he said.
Sebi eyes structural reforms in derivatives market
The Sebi Chair told The Financial Times that India's booming
derivatives market
needed 'structural reforms', and said the regulator was examining ways to strengthen protections for retail investors.
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'[The] derivatives market needs some structural reforms,' he told FT, noting that while volumes have declined, 'not to the extent that is desirable'.
According to Sebi data, India's options market accounted for nearly 90% of global volumes last year. But a recent regulator report said nine out of ten individual traders lost money trading options.
The number of individual participants doubled to 9.6 million between March 2022 and March 2025, with annual losses swelling from $4.7 billion to $12.2 billion. Sebi has since tightened entry norms and introduced other reforms that brought down the number of active traders by 20% year-on-year as of June.
Pandey told The Financial Times that Sebi is trying to 'sensitise' investors 'not to go into' risky futures and options segments. Still, he said the regulator has no intention of stifling the market. 'We've always said this derivative market is important for us, there's no way we will kill the market. You develop the market, you don't kill it.'
Jane Street fallout
Sebi's July order against Jane Street accused the U.S.-based firm of manipulating index movements, particularly in Nifty and Bank Nifty, on expiry days to profit from large options positions. The regulator alleged the firm took oversized bets in the cash and futures markets to move prices in its favour, calling the strategy a 'sinister scheme'.
According to Sebi, Jane Street earned over Rs 36,500 crore in India between January 2023 and March 2025, Rs 43,289 crore from index options, and losses of Rs 7,687 crore in the cash and futures markets.
One such instance cited occurred on January 17, 2024, when the firm allegedly bought Rs 4,370 crore worth of Bank Nifty stocks and futures in the morning, triggering an index rally. While holding bearish options positions, it reversed the trades in the afternoon, causing a sharp decline and earning Rs 734.93 crore that day alone.
The trading ban imposed on Jane Street was lifted after the firm deposited approximately Rs 4,844 crore in an escrow account. The regulator continues to investigate.
Jane Street, according to the Financial Times report, said in an internal memo that it plans to challenge Sebi's order, which it described as 'extremely inflammatory.' The U.S. based firm is reportedly engaging constructively with the regulator and has sought an extension to respond to the interim order issued on July 3.
Looking ahead, Pandey told FT that Sebi expects the number of individual investors in Indian markets to reach 400 million by 2030, up from around 130 million today, driven by a new generation that is 'less inclined to go to the bank and more inclined to go to the market'.
Also read |
NSE reaches Rs 40 crore settlement with Sebi over data disclosure case
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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