Jane Street allegedly used “Intra-day Index Manipulation” and “Extended Marking the Close,” inflating indices in the morning and crashing them by afternoon to profit from options trades
From January 2023 to March 2025, Jane Street earned ₹36,502 crore ($4.3 billion), with ₹4,843.57 crore deemed “unlawful gains” by SEBI due to manipulative trading
SEBI’s action targets practices that misled retail traders, who lost ₹1.35 lakh crore in options trading, with Jane Street’s tactics contributing to roughly 25% of these losses
Jane Street bypassed Foreign Portfolio Investor (FPI) rules using its Indian entity, JSI Investments Pvt Ltd, for synchronized intraday trades in cash and futures markets
The regulator banned Jane Street from trading, froze ₹4,843.57 crore in profits, and mandated closure of open positions within three months
Proprietary firms like Jane Street drive 50% of India’s options volume; their reduced activity may cause short-term volatility, though SEBI’s new rules aim to stabilize markets
SEBI’s use of AI-driven analytics exposed Jane Street’s complex strategies, showcasing India’s robust regulatory framework compared to Western markets
The crackdown warns global quant firms to comply with India’s rules, reinforcing the country’s reputation as a fair and well-regulated market
Jane Street may challenge the order legally, but SEBI’s detailed evidence and public exposure of its strategies could weaken the firm’s competitive edge globally