SEBI to Intensify Surveillance on Derivatives Trading

Context:

SEBI Chairman Tuhin Kanta Pandey, speaking at a public event on Monday, announced that the regulator will strengthen surveillance mechanisms for India’s derivatives market. This comes in the backdrop of recent regulatory action against high-frequency trading firm Jane Street.

Key Highlights:

Focus on Derivatives Oversight

• SEBI plans to tighten surveillance frameworks for derivatives trading on both:
  • Stock exchanges
  • Regulator’s internal systems
• The move aims to detect and deter:
  • Market manipulation
  • Abuse of algorithmic and high-frequency trading (HFT)
  • Insider trading and front-running

Jane Street Case as a Trigger

• SEBI’s action against Jane Street, a U.S.-based HFT firm, was termed a “surveillance matter”.
• The firm allegedly engaged in abusive trading patterns that warranted regulatory scrutiny.

BS