SEBI Bans Jane Street from Indian Market, Seizes ₹4,841 Crore in Alleged Manipulation Case

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In a bold enforcement step, the Securities and Exchange Board of India (SEBI) has prohibited US-based quantitative trading firm Jane Street from participating in Indian securities markets. The market regulator has also seized Rupees 4,841 crore, accusing the firm of gaining unlawful profits through market manipulation. This marks one of SEBI’s most significant actions against a foreign financial entity.

About Jane Street

Founded in 2000, Jane Street is a global leader in quantitative and algorithmic trading, employing over 3,000 professionals across five major international offices in the U.S., Europe, and Asia. The firm reported $20.5 billion in revenue last year and conducts trades in over 45 countries. Known for its high-frequency and data-driven strategies, Jane Street positions itself as a key player in maintaining global market efficiency.

Jane Street’s Operations In India

Jane Street operates in India through four group entities:

• Two registered in India

• Two overseas arms based in Singapore and Hong Kong, registered as Foreign Portfolio Investors (FPIs)

The firm entered the Indian market in December 2020, and since then, its involvement has grown significantly.

Scale Of Business

Between January 2023 and March 2025, SEBI reports that these four entities earned over $5 billion through equity options trading on Indian exchanges. The firm gained attention after it filed a legal case in the U.S. against Millennium Management, accusing them of misusing one of its proprietary trading strategies. That strategy reportedly generated $1 billion in profits in 2023 alone.

SEBI’s Allegations Against Jane Street

SEBI’s investigation outlines a two-phase manipulation scheme:

Phase 1: Driving Up Prices - Jane Street allegedly purchased banking stocks and futures in large volumes to artificially boost the Bank Nifty index.

Phase 2: Profiting from the Fall - At the same time, the firm had short positions in Bank Nifty options, which gain value as the index drops. After inflating the prices, they reportedly offloaded their holdings, leading to a sharp price decline and a massive profit.

Bypassing FPI Rules - Foreign investors are typically restricted from engaging in intraday trading in the cash segment. SEBI claims Jane Street used Indian-based entities to circumvent these regulations, engaging in trades not permitted for FPIs.

Market Repercussions

While the overall equity indices showed limited reaction, the ruling triggered a ripple effect:

• Brokerage Stocks: Shares of intermediary firms declined, fearing tighter scrutiny on derivatives trading

• Market Sentiment: Concerns rose among traders about potential clampdowns on algorithmic and high-frequency trading

Jane Street Responds

Jane Street has challenged SEBI’s conclusions, asserting that it operates in full compliance with the laws of each jurisdiction. The firm is expected to contest the ruling, possibly through legal appeals, and maintain that its trading strategies are lawful and transparent.

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