India’s market regulator, the Securities and Exchange Board of India (SEBI), has temporarily barred the US-based trading firm Jane Street Group from participating in the Indian securities market. This major action follows SEBI’s findings that the firm made unlawful gains worth Rs 48.4 billion (approximately $570 million) through equity derivatives trading.
As per SEBI’s order, Jane Street made profits of Rs 43,289.33 crore by trading index options on Indian exchanges between January 1, 2023, and March 31, 2025.
US-based trading firm Jane Street and its associated entities earned over Rs 36,502 crore from trading index derivatives in the past two years, as per SEBI’s interim order.
According to a 105-page interim order released by SEBI, Jane Street entities are now restricted from buying, selling, or dealing in securities—either directly or indirectly—until further notice. SEBI is also taking steps to recover the alleged gains.
As part of the order, SEBI has instructed banks not to allow any withdrawals from the bank accounts of Jane Street entities without SEBI’s approval. This applies to both individual and joint accounts held in India.
However, SEBI has allowed an alternative. If Jane Street deposits the full Rs 48.4 billion in an escrow account with a lien in SEBI’s favor, and ensures the funds are not released without the regulator’s permission, then the trading restrictions could be lifted.
SEBI Report: 3 Strategies Used by Jane Street on Expiry Days
1. Morning Buy, Afternoon Sell: On expiry mornings, Jane Street would buy a large quantity of Bank Nifty stocks or futures and sell Bank Nifty index options. By afternoon, it would sell the stocks/futures aggressively—profiting as the index closed lower.
2. Last 2-Hour Selling: In the final two hours of trading, Jane Street would aggressively sell Bank Nifty stocks or futures and take short positions in Bank Nifty index options at the close.
3. Late Buying in Nifty: In the last two hours, it would buy large volumes of Nifty stock futures and take long positions in Nifty index options just before the market closed.
Jane Street came under scrutiny last year after it was revealed in a court case involving Millennium Management that the firm had earned $1 billion from Indian equity derivatives. This raised red flags and led SEBI to begin a deeper investigation into potential market manipulation by the firm.
In addition, SEBI has ordered Jane Street to close out all of its open positions in exchange-traded derivative contracts. The firm must do so within three months from the date of the order, or by the time the contracts expire—whichever comes first.
This move is one of the most high-profile regulatory crackdowns in India’s capital markets in recent years and signals SEBI’s intent to ensure fairness and transparency in derivatives trading.
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