India’s market regulator, the Securities and Exchange Board of India (SEBI), has taken stern action against US-based trading firm Jane Street Group and three of its affiliated entities—JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd, and Jane Street Asia Trading Ltd. The regulator has barred all four entities from accessing the Indian securities market and has ordered them to deposit ₹4,843.5 crore (approximately $570 million) as unlawful gains.
The move marks one of SEBI’s most high-profile crackdowns on a foreign institutional investor and signals the regulator’s increasing scrutiny over aggressive trading strategies in India’s booming derivatives market—the largest in the world by number of contracts traded.
Alleged Manipulative Trading Strategy
According to SEBI’s order dated July 3, 2025, Jane Street executed a systematic strategy designed to influence the closing prices of the Bank Nifty index on expiry days. The entire 105 page order can be read here. On 14 separate expiry sessions, the firm would start by heavily buying Bank Nifty futures and stocks in the morning while simultaneously selling large volumes of options. Later in the day, particularly after noon, Jane Street would reverse the position—aggressively selling futures contracts to pull down the index.
For instance, on January 17, 2024, Jane Street purchased Bank Nifty futures worth ₹4,370 crore and sold Bank Nifty options worth ₹32,115 crore in the morning. In the afternoon, it sold ₹5,372 crore worth of Bank Nifty futures, resulting in a sharp decline in the index. This allowed the firm to generate a profit of ₹735 crore in the options segment, despite incurring a minor loss in the cash and futures market—netting a gain of ₹673.4 crore for the day.
A similar pattern was observed on July 10, 2024, where Jane Street sold Bank Nifty futures worth ₹2,800 crore and created a short position in options worth ₹44,154 crore, resulting in a profit of ₹225 crore.
Continued Trading Despite Warnings
SEBI noted that Jane Street entities continued executing such strategies even after reports emerged about a potential regulatory probe. As recently as May 15, 2025, and on two other expiry dates in May, Jane Street reportedly made aggressive trades worth ₹4,911 crore in Nifty futures and constituent stocks in the final hours of trading to influence the expiry-level closing.
Regulatory Action and Broader Implications
In addition to banning market access, SEBI has directed a debit freeze on all bank accounts held individually or jointly by the entities, unless cleared by the regulator. The crackdown is based on findings that such trading activities violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.
As India’s derivatives market continues to attract global high-frequency traders and market makers, SEBI’s action sends a strong signal about the boundaries of acceptable trading behavior in one of the world’s fastest-growing financial markets.
