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SEBI levelled serious allegations against Jane Street, stating they orchestrated a calculated scheme to manipulate India's derivatives market. (AI image)
Jane Street SEBI ban: US quant trading firm Jane Street has approached the Securities and Exchange Board of India (SEBI) to lift the trading restrictions after depositing Rs 4,843.58 crore in an escrow account.Following the interim order in the market manipulation case, Sebi confirmed that Jane Street has credited the specified amount to an escrow account, with a lien marked in the regulator's favour, according to an ET report.The firm has submitted a formal request to Sebi, seeking removal of specific conditional restrictions imposed under the interim order, subsequent to establishing the escrow account as per the regulatory requirements.The regulatory authority is presently reviewing the appeal in line with the stipulations outlined in the interim order, the report said.Sebi has affirmed its dedication to maintaining proper procedures and safeguarding the securities market's integrity.
What is the Jane Street ban about?
SEBI levelled serious allegations against Jane Street, stating they orchestrated a calculated scheme to manipulate India's derivatives market. The regulatory body discovered that the firm accumulated profits of approximately Rs 36,500 crore through systematic market manipulation activities.
According to investigations quoted in the report, the organisation implemented a strategy of aggressive purchasing of Nifty Bank component stocks and futures in early trading hours, leading to artificial price inflation. Subsequently, they would liquidate these positions through concentrated selling activities later in the day, triggering price declines. These synchronised transactions were executed to influence the index at crucial intervals to benefit their substantial options holdings.Also Read | Jane Street ban: Why has SEBI barred US-based trading firm, which made multi-thousand crore profit, from India’s securities markets? ExplainedThe regulatory investigation revealed that Jane Street maintained "consistently the largest risks in 'cash equivalent' terms in F&O, particularly on index option expiry days." The authority highlighted that "what sets apart the trading pattern of the JS Group as prima facie being manipulative, is the intensity and sheer scale of their intervention in the underlying component stock and futures markets."SEBI's probe revealed substantial figures demonstrating Jane Street's extensive activities in Indian markets. Throughout the investigation period, Jane Street accumulated total earnings of Rs 36,502.12 crore across various market segments.The trading behaviour indicates that Jane Street utilised cash equities, stock futures, and index futures segments to influence market prices, sustaining losses in these areas whilst generating substantial profits through options trading.The revelation has significantly affected Indian markets, impacting capital market infrastructure shares, including BSE and the non-listed NSE. The derivative trading volumes have experienced a considerable reduction of approximately 20% following the SEBI directive.During Thursday's weekly options expiry, traditionally the most active trading session, the turnover decreased by more than 21%, falling to Rs 472.5 lakh crore from Rs 601.2 lakh crore the previous week, the report said.Also Read | Jane Street ‘market manipulation’ impact? Indian retail traders suffered heavy losses; Rs 1.05 lakh crore wiped out in derivatives trading in FY25
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