Sebi suspends US trading giant Jane Street’s market access, freezes Rs 4,840 cr over Nifty manipulation

In a rare but stringent move, India’s securities market regulator, the Securities and Exchange Board of India (Sebi), has barred US-based proprietary trading firm Jane Street Group from participating in the Indian securities market. This means Jane Street, a major global player in proprietary trading, can no longer buy or sell securities in India while Sebi investigates allegations of market manipulation.

The Sebi has also ordered the freezing of approximately Rs 4,840 crore (around $567 million) held in Jane Street’s accounts. The regulator alleges that these funds represent unlawful gains accrued through manipulative trading activities, particularly in the derivatives segment involving equity index options linked to the Nifty 50 index.

“Entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly,” the SEBI notice said, referring to Jane Street entities.

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“This is an unusual case where prima facie, multiple liquid stocks with high retail participation have together been manipulated to facilitate the manipulation of the index options market, resulting in massive profits for the manipulators, at the cost of other participants and retail traders,” the order said.

The move follows complaints from market participants who raised concerns about irregular trading patterns and potential abuse of market mechanisms by Jane Street. The Sebi had in February issued a warning to Jane Street.The investigation has since intensified, leading to this decisive action.

To enforce the freeze, the Sebi has directed banks and financial institutions not to process any debits or withdrawals from Jane Street’s accounts without explicit approval from the regulator. Meanwhile, the firm’s existing positions in the Indian market will be closely monitored until the probe is completed.

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For Jane Street, this comes as a significant setback. The firm has denied any wrongdoing and plans to cooperate with Sebi to clarify the situation. Jane Street, a major player in global proprietary trading, has, however, also contested Sebi’s charges.

Jane Street, in an emailed response to Reuters, said it disputes the findings of the SEBI interim order and will further engage with the regulator. “Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world,” the firm said.

This comes amid Sebi’s increasing vigilance and regulatory assertiveness in safeguarding Indian markets from manipulations, as the derivative market here has been expanding rapidly, with significant participation from global trading firms in recent years.