Sebi lifts ban on Jane Street, allows US firm to resume trading but...

The Securities and Exchange Board of India (SEBI) has allowed the US proprietary trading firm Jane Street to resume trading in the Indian stock markets, noting that the company was permitted to resume trading after complying with the regulator's interim order of July 3 and transferring Rs 4,843 crore to the escrow account.

Why did SEBI allow Jane Street to resume trading?

SEBI stated that the entities have been directed to cease and desist from directly or indirectly engaging in any fraudulent, manipulative or unfair trade practice or undertaking any activity, either directly or indirectly, that may be in breach of extant regulations, including by dealing in securities using any of the patterns identified or alluded to in the interim order. The entities have confirmed that they will comply with this. Additionally, the market regulator directed the stock exchanges to continuously monitor the future trading activities and positions of the group to prevent any potential manipulative behaviour until it concluded its investigations and any resulting actions.

SEBI imposes a recovery of over Rs 4800 crore on Jane Street

Earlier, on July 14, as per the SEBI interim order dated July 3, the Jane Street group deposited Rs 4843.57 crore into an escrow account. In the interim order, SEBI has charged the Jane Street Group with index manipulation and imposed a recovery of one of the highest ever illegal gains made by the group, amounting to Rs 4,843.57 crore. The order targets four key entities under the Jane Street Group umbrella: JSI Investments Pvt. Ltd., JSI2 Investments Pvt. Ltd., Jane Street Singapore Pte. Ltd., and Jane Street Asia Trading Ltd.SEBI, in its order, noted that the Group employed a profit-maximising scheme to manipulate the market, booking substantial profits in index options while incurring smaller losses in the cash and futures segments.

The market regulator's 105-page order said that the interim action follows a detailed investigation into manipulative trading practices by the Group, especially around the weekly expiry of index options on the NSE. The interim order further stated that Jane Street Group entities, despite caution letters from NSE in February 2025 and their own commitments to refrain from certain trading behaviours, continued to deploy the same high-risk and market-distorting strategies.

(With inputs from ANI)