Jane Street to Contest SEBI's Market Manipulation Charges in India

Jane Street, a US-based global trading firm, is set to challenge a regulatory action by the Securities and Exchange Board of India (SEBI), which accused it of manipulating Indian stock markets, as per Reuters. The dispute involves trading patterns linked to India's Bank Nifty index and has triggered a ban and the freezing of significant funds.

Jane Street Rejects SEBI’s Allegations 

On July 5, 2025, SEBI barred Jane Street from participating in Indian securities markets and seized $567 million, citing market manipulation over a 2-year period. 

SEBI claims Jane Street bought substantial quantities of Bank Nifty constituents in both cash and futures markets to artificially influence prices during morning trades. Simultaneously, the firm allegedly took large short positions in index options to benefit from the subsequent decline.

Jane Street strongly denied the charges in an internal email to employees, calling the accusations “extremely inflammatory.” The firm expressed dismay over being “mischaracterized” and stated that it had made changes to its trading strategies after earlier discussions with SEBI, which it believed addressed concerns.

Regulatory Tensions and Communication Breakdown

Jane Street’s email noted ongoing efforts to cooperate with SEBI since February 2025, but claimed that these attempts were “consistently rebuffed.” SEBI has now expanded its investigation to cover other indexes and trading venues, suggesting that the matter may extend beyond Bank Nifty derivatives.

This escalation comes as SEBI intensifies surveillance over derivative market activity, particularly in light of India's dominant position in global equity derivatives accounting for nearly 60% of global trades as of April 2025.

Read More: Jane Street Entities Made Over ₹36,000 Crore in Derivatives Trading: SEBI!

What This Means for Indian Markets and Global Traders

Jane Street’s legal challenge and SEBI’s aggressive stance highlight the increasing scrutiny on high-frequency and algorithmic trading in Indian markets. With one of the most active derivatives ecosystems globally, any precedent set by this case could influence foreign participation and regulatory frameworks moving forward.

Conclusion

The clash between Jane Street and SEBI underscores growing regulatory vigilance in India’s financial markets. As the legal and procedural responses unfold, global trading firms operating in India may closely watch how this high-stakes dispute shapes future oversight of complex market strategies.

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