Jane Street Requests Extension to Reply to SEBI’s Market Manipulation Order

US-based proprietary trading firm Jane Street has formally sought more time from the Securities and Exchange Board of India (SEBI) to respond to the interim order issued on July 3, 2024, as per a Bloomberg report. The order levied allegations of market manipulation involving trades in Nifty and Bank Nifty indices, and initially barred the firm from Indian securities trading.

Jane Street Seeks More Time and Key Data from SEBI

Jane Street is under scrutiny after SEBI alleged the firm executed trades designed to influence the Nifty and Bank Nifty indices. According to SEBI, Jane Street acquired significant positions in index constituents in the cash and futures segments to support the indices, while building short positions in options. These option positions were settled or expired later in the session at favourable levels, allegedly causing losses for retail market participants.

Following the issuance of the interim order, SEBI gave the trading firm 21 days to respond. However, Jane Street has requested an extension, citing the complexity of the charges and the need for specific trade-related data from the regulator to file a comprehensive rebuttal.

Deposit of ₹4,840 Crore and Ongoing Non-Participation 

Last week, SEBI lifted the trading ban after Jane Street deposited ₹4,840 crore with the regulator, granting SEBI rights over the funds. Even with the restriction lifted, Jane Street chose not to reenter trading activities, including cash and options segments. The firm had earlier agreed to abstain from options trading as a show of cooperation with the ongoing investigation.

Read More: SEBI Eyes Simpler Rules for Non-Convertible Securities Issuers!

Background and Commitment to Compliance

Jane Street, founded in 2000, operates as a global quantitative trading firm with over 3,000 employees across five offices. In its official statement, the firm emphasised its commitment to integrity and constructive engagement with SEBI, underlining its dedication to contributing to the development of India’s capital market ecosystem.

Conclusion

Jane Street's request for more time and information marks a crucial phase in its efforts to respond to SEBI’s allegations. The firm's cautious stance, including voluntary trading abstention despite lifted restrictions, reflects its measured approach in addressing the interim order.

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