The Securities and Exchange Board of India (SEBI) has barred the U.S.-based trading firm Jane Street Group and its affiliates from accessing the Indian securities market, alleging manipulation in derivatives trading. SEBI has directed the entities to deposit ₹4,843.5 crore, which it alleges are illegal gains, into an escrow account. Additionally, a debit freeze has been imposed on their bank accounts.
SEBI's investigation revealed that between January 2023 and May 2025, Jane Street executed large trades in the underlying cash and futures markets to influence index movements and profit from options trading. The regulator alleges that the firm engaged in manipulative trades on at least 21 occasions involving securities from the Nifty and Bank Nifty indices. According to SEBI, these actions compromised market fairness and integrity, allowing the group to unlawfully profit from their trading activities in the index options market.
SEBI's order outlines a recurring trading pattern allegedly used by Jane Street, particularly on index expiry days. The strategy involved large-scale purchases of Bank Nifty futures and equities in the morning, paired with aggressive selling of Bank Nifty options. This would be followed by significant selling in the futures market post-noon, impacting the index's closing level. For example, on January 17, 2024, Jane Street reportedly bought Bank Nifty futures worth ₹4,370 crore and sold Bank Nifty options worth ₹32,115 crore in the morning session. Later in the day, it sold Bank Nifty futures worth ₹5,372 crore, resulting in a peak short position of ₹46,620 crore in the options segment. The firm allegedly booked a profit of ₹735 crore from these trades.
SEBI's Whole Time Member, Ananth Narayan G, stated that the Jane Street Group is alleged to have engaged in manipulative trades on at least 21 occasions involving securities forming part of the Nifty and Bank Nifty indices. SEBI observed a consistent pattern across multiple trading sessions, concluding that these were not routine transactions but instances of manipulation in violation of SEBI's Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.
According to SEBI, between January 2023 and March 2025, Jane Street's four group entities cumulatively made over ₹43,289 crore in profits from trading index options. The regulator found that on at least 15 BANKNIFTY options expiry days, Jane Street employed an "Intra-day Index Manipulation Strategy". This strategy involved aggressively buying large quantities of BANKNIFTY constituent stocks and futures contracts early in the trading session, temporarily pushing up the banking index, while simultaneously reaping outsized gains in index options positions. SEBI concluded that Jane Street's intention was not genuine investment or hedging but rather to artificially move the index levels to benefit its options positions.
In response to SEBI's ban, Jane Street has disputed the findings of the interim order and stated that they will further engage with the regulator. In an emailed statement to Reuters, the company said, "Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world". Despite the ban, the company has stated its intention to cooperate fully with SEBI, affirming its commitment to regulatory compliance globally.
SEBI has also instructed banks to ensure that "no debits are made without permission" from the accounts linked to these companies. The regulator will keep a close watch on Jane Street's current trading positions until its investigation is complete.
