Proprietary trading firm Jane Street has requested more time from India’s market regulator, SEBI, to respond to an interim order accusing it of manipulative trading practices.
The SEBI Showdown
On July 3, the Securities and Exchange Board of India (SEBI) issued a significant interim order against Jane Street. The New York-based firm was accused of engaging in manipulative trading practices, specifically in Nifty futures.
SEBI’s order was severe, demanding the seizure of an alleged Rs 4,843.57 crore, which the regulator deemed ‘illegal gains’. Furthermore, Jane Street was barred from all securities trading until this substantial amount was recovered. The firm was initially given 21 days to file its reply or objections.
Jane Street Responds
In response to SEBI’s stringent action, Jane Street deposited the full amount of Rs 4,843.57 crore into an escrow account. This deposit, made on July 14, included a lien in SEBI’s favor.
However, Jane Street was quick to clarify that this payment was made “without prejudice” to its legal rights and remedies. The firm emphasized its intention to pursue these legal avenues, signaling an ongoing dispute.
Conditional Return to Trading
Following the deposit of the funds, SEBI permitted Jane Street to resume its operations on July 21. This was a crucial development for the firm, a major player in India’s derivatives market.
Despite being allowed back, Jane Street is reportedly staying clear of trading in both the options and cash markets for now. This cautious approach is expected to continue until various outstanding issues with the regulator are fully resolved.
Strong Denial from the Firm
Jane Street has consistently and strongly rejected SEBI’s allegations from the outset. In internal communications, the firm described the regulator’s claims as “extremely inflammatory.”
The firm expressed deep disappointment over the accusations, maintaining its commitment to upholding the integrity of India’s capital markets. Jane Street emphasized that its conduct always aims to contribute to the market’s continued development.
- Jane Street seeks more time to respond to SEBI’s interim order regarding alleged manipulative trading.
- SEBI accused the firm of illegal gains of Rs 4,843.57 crore from Nifty futures trading.
- Jane Street deposited the funds but explicitly reserved its legal rights to contest the order.
- SEBI has allowed the firm to resume operations, though Jane Street remains cautious in specific market segments.
- The firm strongly denies all allegations of manipulative practices, calling them “inflammatory.”
This ongoing dispute highlights the strict regulatory environment in India’s financial markets. The resolution between SEBI and Jane Street will be closely watched by other participants in the derivatives space.
