Global trading giant Jane Street has been barred from participating in India's securities markets following an investigation by the Securities and Exchange Board of India (sebi). The interim order, issued by the market regulator, accuses the firm and its subsidiaries of manipulating index-based derivative trades in the Indian market to secure massive illegal profits. The ban, announced late last week, restricts Jane Street and four affiliated entities from buying, selling, or dealing in any Indian securities until further notice.
The ban covers Jane Street Singapore Pte. Ltd., Jane Street Asia Trading Ltd., JSI Investments Private Ltd., and JSI2 Investments Private Ltd. Sebi alleges that the group engaged in a sophisticated pattern of market manipulation centered around the Bank Nifty and Nifty indices. The firm has been ordered to deposit Rs 4,843 crore—labelled as unlawful gains—into an escrow account with a commercial bank as investigations continue.
Founded in 2000, Jane Street has grown to become one of the world's most prominent quantitative trading firms. These firms utilize advanced mathematical models and algorithms to execute high-frequency trades, often buying and selling hundreds of thousands of shares in fractions of a second. In 2024, Jane Street reported global net trading revenue of $20.5 billion, outperforming several major financial institutions. It operates across multiple international financial hubs including London, Singapore, Amsterdam, and Hong Kong, and reportedly made billions from Indian markets alone.
Sebi began examining Jane Street’s India trades in early 2024 after noticing unusual patterns, particularly on index expiry days. The regulator flagged massive shifts in the Bank Nifty index during morning hours followed by large-scale reversals later in the day. It directed the National Stock Exchange to review trades between January 2023 and March 2025. According to sebi’s 105-page report, Jane Street consistently executed high-risk trades in both the cash and derivatives markets on at least 18 occasions.
The regulator concluded that the firm followed a strategy of buying significant volumes in Bank Nifty index futures and cash markets in early trading hours, thereby inflating the index temporarily. Simultaneously, it would build large short positions in index options. Once the prices were artificially driven up, the firm would reverse its futures positions while profiting heavily from the collapse in index levels, resulting in a windfall from its options contracts.
An example of this strategy was seen on January 17, 2024, when Jane Street incurred a loss of Rs 61.6 crore in futures and cash trades but earned Rs 734.93 crore in options. A similar pattern was repeated on July 10, 2024. In total, Jane Street reportedly made Rs 36,671 crore over the two-year period under review, despite suffering losses in some segments of its trading strategy.
Sebi’s order described this practice as egregious manipulation, stating that the firm created a false appearance of market activity to deceive other traders. The manipulation was said to exploit the volatility of weekly index options expiry days, and caused financial harm to lakhs of retail and institutional investors. The regulator has impounded the illegal gains made across 18 such trading days, totaling Rs 4,843 crore.
Jane Street responded to the allegations by expressing its disagreement with sebi’s conclusions and affirmed its commitment to regulatory compliance across all markets. The firm has been granted 21 days to file objections or responses to the interim order and can challenge the decision through the Securities Appellate Tribunal.
India is home to the world’s largest equity derivatives market, contributing to nearly 60 percent of global volumes as per industry data. However, this market is highly volatile and complex. While foreign institutional investors like Jane Street have reaped massive profits from index derivatives, individual Indian investors have not fared as well. According to a recent sebi study, retail traders lost Rs 1.8 lakh crore in index derivatives over a two-year period.
A source familiar with sebi’s decision said the timing of the announcement—immediately after a derivatives expiry cycle—was strategic to minimize potential market disruption. Furthermore, new regulations effective from July 1 place tighter limits on positions in derivatives, offering additional safeguards.
Despite the regulatory clampdown, market liquidity is expected to remain stable due to the limited involvement of Jane Street in the broader cash market and the presence of other major institutional participants. Still, the episode raises questions about the scale and ethics of high-frequency trading in emerging markets and highlights the growing scrutiny of international financial players operating in India.
Sebi’s move marks one of its most aggressive actions against a foreign entity and signals a firm stance on market integrity. As the investigation proceeds, market participants are closely watching how India’s regulators manage the fine balance between encouraging global investment and ensuring a fair, transparent financial system.
