Global trading firm Jane Street banned by Sebi from securities market

India Today

7 hours ago

Sebi has barred US-based trading firm Jane Street Group from participating in the country's securities market. This move comes after the Securities and Exchange Board of India (Sebi) accused the firm of making unlawful gains through equity derivatives trading."Entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly," said Sebi in its order pertaining to Jane Street.According to an order published on Sebi's website, the regulator has ordered the seizure of Rs 48.4 billion (approximately $570 million), which it claims is the total amount of illegal profit made by Jane Street. Sebi has also directed Indian banks to ensure that no funds can be withdrawn from the firm's accounts without the regulator's approval."The total amount of unlawful gains earned by the JS Group from the alleged violations, as provided in Table 44i.e. Rs 4,843,57,70,168/-(Four Thousand Eight Hundred Forty-Three Crore Fifty Seven Lakh Seventy Thousand One Hundred and Sixty Eight Rupees only), shall be impounded, jointly and severally," said Sebi in its order. SEBI BANS JANE STREET FROM TRADINGSebi's order states that Jane Street Group and its related entities 'are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly.'This decision effectively blocks the firm's operations in India's fast-growing equity derivatives market. The regulator did not specify the exact time period during which the alleged trading violations occurred, but the order reflects a significant crackdown on overseas institutional players operating in the country.FIRM MADE $2.3 BILLION IN DERIVATIVE REVENUEJane Street is one of the most active trading firms in the world, operating in equities, bonds, ETFs, and derivatives. The Bloomberg report notes that the firm generated more than $2.3 billion in net revenue from equity derivatives in India last year alone.Sebi's action is likely to affect not just Jane Street's India operations, but also send a strong message to other foreign entities involved in aggressive trading strategies.SEBI GROWING MORE WATCHFUL OF FOREIGN PLAYERSSebi has been investigating Jane Street's derivatives activity following complaints from certain market participants, who alleged that the firm's trades amounted to market manipulation. While details of the investigation remain confidential, the action suggests a deeper scrutiny of high-frequency trading behaviour in the Indian market.'This may signal Sebi's growing vigilance and willingness to assert control over foreign institutional activity making hefty gains in its derivatives market — particularly where such strategies blur the line between smart trading and market distortion,' Charu Chanana, Chief Investment Strategist at Saxo Markets in Singapore told Bloomberg.INDIA'S DERIVATIVES MARKET UNDER THE SPOTLIGHTIndia is now the world's largest derivatives market by number of contracts traded. It has seen a rapid rise in foreign institutional interest, especially from firms like Citadel Securities, Optiver, and Jane Street. The country's market is also experiencing a surge in retail investor participation, with options premiums having increased 11 times in the past five years.However, the booming activity has also raised concerns among regulators about volatility, speculation, and possible manipulation in the market. Sebi's move against Jane Street is being seen as a sign that the regulator is willing to take strict action when it believes the trading environment is being exploited unfairly.- Ends
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