Market regulator Sebi on Friday barred Jane Street Group from India's securities market and ordered a freeze on Rs 4,840 crore in alleged unlawful gains. But the move was not sudden; it followed a 15-month-long trail of regulatory scrutiny, caution letters, and what Sebi described as repeated disregard by the U.S.-based trading firm.
Here is how the events unfolded leading up to the July 4 order.
April 2024: The first red flag
Sebi’s first look into Jane Street’s trades came in April 2024, triggered by media reports referencing a legal dispute in the US. The matter involved the alleged unauthorised use of Jane Street’s proprietary strategies in Indian markets, prompting Sebi to begin an internal review.
July–August 2024: NSE begins review, Jane Street responds
On July 23, 2024, SEBI asked the National Stock Exchange to examine the trading activity of the Jane Street Group (JS Group) to determine whether there was market abuse involved.
Sebi officials met with the firm on August 20, and Jane Street submitted a written explanation of its trades on August 30.
October–November 2024: Policy changes and NSE’s report
Amid rising concerns over aggressive expiry-day trading in index options, Sebi issued a circular on October 1, 2024, announcing policy steps to curb overtrading on expiry days, a structural issue the regulator was beginning to link to the strategies deployed by large trading firms.
On November 13, the NSE submitted its examination report on JS Group’s trading patterns to SEBI.
December 2024: Sebi escalates its probe
By December, Sebi had observed what was described as “abnormally high or low volatility on weekly index options expiry days.” It flagged certain entities, including Jane Street, for “consistently running what appeared to be by far the largest risks in ‘cash equivalent’ terms in F&O, particularly on expiry days.”
A team of Sebi officials was constituted to conduct a deeper, more comprehensive investigation.
February 2025: Sebi issues a warning
On February 4, 2025, SEBI’s internal team found prima facie evidence of a violation of its PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations by Jane Street.
Two days later, NSE, acting on SEBI’s instruction, issued a caution letter to Jane Street Singapore Pte Ltd and JSI Investments Pvt Ltd. The entities were “advised to refrain from taking large (cash-equivalent) positions and to refrain from undertaking certain trading patterns.”
Jane Street responded to the letter on February 6 and again on February 21.
May 2025: SEBI notes continued violations
Despite the caution, Jane Street “was observed to continue to run very large ‘cash-equivalent’ positions in index options,” Sebi said. These positions appeared similar to the ones flagged earlier, prompting the regulator to prepare enforcement action.
July 4, 2025: Sebi clamps down
On Friday, Sebi issued an interim order barring Jane Street and its affiliates from accessing India’s securities market and directed the impounding of Rs 4,840 crore in alleged illegal gains.
The regulator also instructed banks to freeze withdrawals from accounts linked to Jane Street Singapore, JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, and Jane Street Asia Trading Ltd.
What Sebi found
Sebi alleged that Jane Street repeatedly used high-volume, cross-segment strategies to distort index levels of Bank Nifty and Nifty 50 during weekly expiry days, misleading large numbers of retail traders and booking enormous profits.
One such “Intra-day Index Manipulation” strategy involved buying Rs 4,370 crore worth of Bank Nifty stocks on the morning of January 17, 2024, to inflate the index, only to unwind the trades later while holding bearish options bets — earning Rs 734.93 crore that day alone.
The regulator has ordered the impounding of Rs 4,840 crore in alleged unlawful gains, directing banks to freeze any debit transactions from Jane Street-linked accounts without its permission.
According to Sebi’s order, Jane Street made Rs 36,500 crore in net profits from Indian markets between January 2023 and March 2025, with Rs 43,289 crore coming from index options.
The firm allegedly deployed these manipulative strategies on all 18 expiry days SEBI examined, using “intra-day manipulation” on 15 days and “extended marking the close” tactics on the rest.
Sebi said the firm’s strategy misled retail traders into dealing at distorted prices. “What sets apart the trading pattern of the JS Group as prima facie being manipulative is the intensity and sheer scale of their intervention in the underlying component stock and futures markets,” the order said.
Also read | Sebi bars U.S. trading firm Jane Street from Indian markets, orders Rs 4,840 crore freeze over alleged Nifty manipulation
While the NSE had closed its probe after reviewing a response from Jane Street’s local trading partner Nuvama Wealth, SEBI decided to pursue enforcement action, culminating in Friday’s ban.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Here is how the events unfolded leading up to the July 4 order.
April 2024: The first red flag
Sebi’s first look into Jane Street’s trades came in April 2024, triggered by media reports referencing a legal dispute in the US. The matter involved the alleged unauthorised use of Jane Street’s proprietary strategies in Indian markets, prompting Sebi to begin an internal review.
July–August 2024: NSE begins review, Jane Street responds
On July 23, 2024, SEBI asked the National Stock Exchange to examine the trading activity of the Jane Street Group (JS Group) to determine whether there was market abuse involved.
Sebi officials met with the firm on August 20, and Jane Street submitted a written explanation of its trades on August 30.
October–November 2024: Policy changes and NSE’s report
Amid rising concerns over aggressive expiry-day trading in index options, Sebi issued a circular on October 1, 2024, announcing policy steps to curb overtrading on expiry days, a structural issue the regulator was beginning to link to the strategies deployed by large trading firms.
On November 13, the NSE submitted its examination report on JS Group’s trading patterns to SEBI.
December 2024: Sebi escalates its probe
By December, Sebi had observed what was described as “abnormally high or low volatility on weekly index options expiry days.” It flagged certain entities, including Jane Street, for “consistently running what appeared to be by far the largest risks in ‘cash equivalent’ terms in F&O, particularly on expiry days.”
A team of Sebi officials was constituted to conduct a deeper, more comprehensive investigation.
February 2025: Sebi issues a warning
On February 4, 2025, SEBI’s internal team found prima facie evidence of a violation of its PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations by Jane Street.
Two days later, NSE, acting on SEBI’s instruction, issued a caution letter to Jane Street Singapore Pte Ltd and JSI Investments Pvt Ltd. The entities were “advised to refrain from taking large (cash-equivalent) positions and to refrain from undertaking certain trading patterns.”
Jane Street responded to the letter on February 6 and again on February 21.
May 2025: SEBI notes continued violations
Despite the caution, Jane Street “was observed to continue to run very large ‘cash-equivalent’ positions in index options,” Sebi said. These positions appeared similar to the ones flagged earlier, prompting the regulator to prepare enforcement action.
July 4, 2025: Sebi clamps down
On Friday, Sebi issued an interim order barring Jane Street and its affiliates from accessing India’s securities market and directed the impounding of Rs 4,840 crore in alleged illegal gains.
The regulator also instructed banks to freeze withdrawals from accounts linked to Jane Street Singapore, JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, and Jane Street Asia Trading Ltd.
What Sebi found
Sebi alleged that Jane Street repeatedly used high-volume, cross-segment strategies to distort index levels of Bank Nifty and Nifty 50 during weekly expiry days, misleading large numbers of retail traders and booking enormous profits.
One such “Intra-day Index Manipulation” strategy involved buying Rs 4,370 crore worth of Bank Nifty stocks on the morning of January 17, 2024, to inflate the index, only to unwind the trades later while holding bearish options bets — earning Rs 734.93 crore that day alone.
The regulator has ordered the impounding of Rs 4,840 crore in alleged unlawful gains, directing banks to freeze any debit transactions from Jane Street-linked accounts without its permission.
According to Sebi’s order, Jane Street made Rs 36,500 crore in net profits from Indian markets between January 2023 and March 2025, with Rs 43,289 crore coming from index options.
The firm allegedly deployed these manipulative strategies on all 18 expiry days SEBI examined, using “intra-day manipulation” on 15 days and “extended marking the close” tactics on the rest.
Sebi said the firm’s strategy misled retail traders into dealing at distorted prices. “What sets apart the trading pattern of the JS Group as prima facie being manipulative is the intensity and sheer scale of their intervention in the underlying component stock and futures markets,” the order said.
Also read | Sebi bars U.S. trading firm Jane Street from Indian markets, orders Rs 4,840 crore freeze over alleged Nifty manipulation
While the NSE had closed its probe after reviewing a response from Jane Street’s local trading partner Nuvama Wealth, SEBI decided to pursue enforcement action, culminating in Friday’s ban.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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