Context:
On July 4, 2025, the Securities and Exchange Board of India (SEBI) took stern enforcement action against U.S.-based hedge fund giant Jane Street Group and its affiliated entities for allegedly manipulating the Bank Nifty index and unlawfully earning ₹4,843.6 crore through a deceptive trading scheme.
Key Allegations by SEBI:
- Market Manipulation Tactics: Jane Street is accused of artificially inflating prices in the underlying cash market on weekly index expiry days to benefit its options positions.
- Use of Excessive Orders: The firm allegedly placed excessively large orders at high prices, thereby influencing index levels for strategic advantage.
- Violation of PFUTP Norms: SEBI noted that such actions may violate the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) under the SEBI Act.
SEBI’s Interim Order:
- Immediate Market Access Ban: Jane Street is barred from taking new positions or trading in Indian markets during the investigation period.
- ₹4,844 Crore Impounded: Unlawful profits accrued by Jane Street between January 2023 and March 2025 are under freeze.
- Close Surveillance Ordered: SEBI has instructed stock exchanges to monitor Jane Street’s activities for any indirect market access.
Regulatory Action Taken:
- Market Ban:
- Jane Street and its four entities are barred from accessing Indian securities markets.
- Escrow Order:
- SEBI ordered the creation of an escrow account with a scheduled commercial bank to deposit the entire sum earned through the alleged manipulation.
- Freeze on Accounts:
- Banks, depositories, and other market intermediaries were directed to not allow debits from Jane Street’s accounts without SEBI’s permission.
About Jane Street:
- Headquartered in New York, Jane Street is a major global proprietary trading firm employing over 2,600 people.
- In 2024, it earned $20.5 billion in net trading revenue, nearly double its 2023 earnings.
- It has made ₹36,502 crore in profits in India between Jan 1, 2023, and Mar 31, 2025.
