Jane Street Transfers ₹4,834.6 Crore to SEBI Amid Market Manipulation Allegations
| 2025-07-15
The July 3 order had directed Jane Street to deposit the amount it described as unlawful gains into an escrow account.
Jane Street, a U.S.-based investment firm, has transferred ₹4,834.6 crore to SEBI following allegations of market manipulation.
The Securities and Exchange Board of India (Sebi) announced on Monday that Jane Street, a US-based proprietary trading company, had complied with the interim order issued on 3 July by depositing Rs 4,843.5 crore into an escrow account.
The regulator’s statement confirmed earlier reporting by Indian financial news platform Moneycontrol and outlined the next steps in the case. Jane Street has formally requested that Sebi lift several conditional restrictions imposed under the July order. According to Sebi, this request is “currently under examination” in line with regulatory directions.
The interim order accused Jane Street of deploying unauthorised trading strategies, including Intraday Index Manipulation and Extended Marking the Close, to influence the BANKNIFTY index. This index consists of 12 major Indian banking stocks and is among the country’s most traded benchmarks. Sebi alleged that these strategies allowed Jane Street to generate profits of Rs 36,502.12 crore during the period between January 2023 and March 2025.
According to the order, the firm’s most profitable single trading day was 1 January 2024, when it earned Rs 734.93 crore. Although Jane Street also reported losses in other segments, its gains from index options alone amounted to Rs 43,289.33 crore, compared with cumulative losses of Rs 7,687.21 crore across stock futures, index futures and cash market transactions.
Market Impact
The repercussions of Sebi’s action were immediately visible in trading volumes. On 10 July, the first weekly expiry session following the order, turnover in the NSE’s derivatives segment fell by more than 21 per cent.
Data released by the National Stock Exchange showed that overall derivatives turnover declined to Rs 476.39 lakh crore, down from Rs 605.23 lakh crore recorded on 3 July. The number of contracts traded also fell by about 21 per cent, decreasing to 25.25 crore from 31.92 crore over the same period.
Turnover in weekly index options, which constitute the majority of derivatives trading, dropped by a similar proportion. Experts have warned that with Jane Street barred from the market, turnover in the derivatives segment may continue to slide in the coming weeks.
Supervision and Ongoing Restrictions
While the interim order stated that several restrictions would be lifted once the escrow deposit was completed, Sebi has clarified that prohibitions against manipulative practices remain in force.
Specifically, Jane Street and related entities are still barred from trading using any of the patterns described in the order. Sebi directed stock exchanges to “closely monitor all future dealings and positions” of the Jane Street Group to prevent any recurrence of the practices under investigation.
In its release, Sebi did not specify whether Jane Street’s request includes permission to resume trading strategies similar to those that triggered the investigation. Moneycontrol reported that it had sought clarification from the regulator but had not received a response by publication time.
Context
The case has highlighted the scale of Jane Street’s presence in Indian equity derivatives. Its aggressive trading strategies, extensive financial resources and technological capabilities allowed the firm to dominate volumes, particularly in index options linked to BANKNIFTY.
Sebi’s findings have also raised questions about market integrity and the ability of large global players to influence price formation in emerging economies. The regulator’s actions follow broader international scrutiny of high-frequency and algorithmic trading, as authorities seek to ensure fair and transparent markets.
While Sebi continues to examine Jane Street’s request to ease certain restrictions, the firm remains under enhanced supervision. The outcome of this review could have significant implications for both Indian markets and the oversight of complex trading strategies worldwide.
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