The U.S. financial regulator, the Securities and Exchange Commission (SEC), has asked India’s market regulator, Sebi (Securities and Exchange Board of India), for information about an ongoing investigation against Jane Street. Jane Street is a major New York-based trading firm accused of manipulating India’s derivatives market.
Why Is Jane Street Being Investigated?
According to Sebi, Jane Street made Rs 4,843 crore in illegal profits by using aggressive and unfair trading strategies. These included buying heavily in the morning and selling later in the day to influence the Bank Nifty Index, especially around expiry dates. This allegedly hurt small, retail investors.
What Did Sebi Do?
On July 3, Sebi issued an order:
- Banned Jane Street from trading temporarily.
- Ordered the firm to deposit Rs 4,843.57 crore — the amount Sebi claims was earned unfairly.
Jane Street complied and placed the full amount in an escrow account (a temporary holding account). Later, on July 21, Sebi lifted the trading ban conditionally, a decision that legal and market experts saw as fair.
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What Is the SEC’s Role?
Since both the SEC and Sebi are members of an international agreement (IOSCO), they can share investigation details with each other. That’s why the SEC reached out to Sebi to understand more about the case.
What’s Next for Jane Street?
Jane Street hasn’t legally challenged Sebi’s findings yet but says it might do so in the future. The firm has been informed about upcoming hearings, and its lawyers are preparing a formal response.
Sebi is continuing its investigation, and it might expand the probe to include the Nifty Index and other stocks. It has also asked stock exchanges to keep a close watch on Jane Street’s future trades. A final order will be given after the hearings are completed.
What Experts Are Saying
- Legal experts think Sebi only looked at the most profitable days rather than the full picture.
- Corporate lawyer HP Ranina said Sebi’s approach is fair and if Jane Street is cleared, they will get the money back.
- Market expert Sunil Shah appreciated Sebi’s actions to protect small investors and hopes for better monitoring in the future.
