Jane Street Ban: Why Has SEBI Barred US-Trading Firm From India's Securities Market?

In a major crackdown, the Securities and Exchange Board of India (SEBI) has barred US-based trading giant Jane Street from participating in Indian securities markets, accusing the firm of manipulating stock prices to reap unlawful gains. The market watchdog has also ordered Jane Street to disgorge ₹4,844 crore, citing violations that shook the integrity of the trading ecosystem.

In an interim order issued late Thursday, SEBI Whole-Time Member Ananth Narayan stated that strict action was necessary to protect investor confidence and prevent further manipulation.

"I am also convinced that interim cease and desist directions are warranted in the facts of this case. Also, until the completion of the investigation and the related proceedings, it is imperative that exchanges should monitor any future dealings and positions of JS Group closely on an ongoing basis, to ensure that they do not, either directly or indirectly, indulge in any kind of manipulative activity.

This is crucial to preserve the overall faith in the ecosystem and to protect investors," Business Standard quoted Ananth Narayan, Whole-time Member, Sebi, has stating in a 105-page order.

How Jane Street Allegedly Manipulated the Market

According to SEBI, Jane Street engaged in aggressive trading strategies, particularly on weekly index option expiry days, by building large positions in index options while simultaneously influencing prices in the cash and futures markets. With the underlying stock market often witnessing lower volumes, Jane Street's high-volume trades could move index levels, allowing the firm to lock in substantial profits from options trades.

Investigations revealed that Jane Street was responsible for a significant portion of net buying in 12 Bank Nifty component stocks and their futures. This "burst of buying" artificially inflated prices, enabling the firm to profit in the options segment.

"Jane Street Group placed a disproportionately high number of buy orders at or above the last traded price in Bank Nifty constituent stocks (in both cash as well as futures segments), thereby either aggressively attempting to push up or support the price rise in the stocks," SEBI stated. Such practices, especially around market closing times on expiry days, violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.

Massive Gains Under Scrutiny

Between January 2023 and March 2025, Jane Street reportedly earned ₹44,358 crore through options trading, while posting losses of ₹7,208 crore in stock futures, ₹191 crore in index futures, and ₹288 crore in cash trades-leading to an overall profit of ₹36,671 crore. SEBI has identified ₹4,843 crore of this as potentially unlawful gains.

What is Jane Street?

Jane Street is a prominent global proprietary trading firm, founded in 2000, with over 3,000 employees and a presence in 45 countries. The firm has expanded rapidly in Asia, particularly in Hong Kong. Last year, Jane Street posted annual revenue of $20.5 billion, according to a report in Reuters.

The company first came into the Indian spotlight in 2023 when it sued Millennium Management, another hedge fund, in a US court. The case revealed that Jane Street had developed a highly profitable India-focused options trading strategy, reportedly earning $1 billion from it in 2023 alone.