SEBI Implements Trading Restrictions On Jane Street Group Following Market Abuse Investigation

The Securities and Exchange Board of India (SEBI) has taken action against the Jane Street Group, preventing them from engaging in the securities market. This decision, made on July 3, 2025, also restricts related entities from trading in securities. SEBI's interim order mandates that ₹4,843 crore, identified as unlawful gains by Jane Street entities, be deposited into an escrow account at a scheduled commercial bank in India.

Banks holding accounts for Jane Street entities have been instructed to halt any debits without SEBI's prior approval. Additionally, these entities must close or settle any open positions within three months or upon contract expiry, whichever comes first. The Jane Street Group is a global proprietary trading firm with over 2,600 employees across the US, Europe, and Asia.

SEBI's Investigative Timeline

In April 2024, SEBI began examining media reports about Jane Street Group's alleged unauthorised use of proprietary trading strategies in India. By July 23, 2024, the National Stock Exchange (NSE) was asked to scrutinise JS Group's trading activities for potential market abuse. Following this, SEBI engaged with JS Group in August 2024.

On November 13, 2024, NSE submitted its report on JS Group's trading activities. In December 2024, SEBI observed unusual volatility during weekly index options expiry days and noted certain entities taking significant risks in cash-equivalent terms on these days. By February 4, 2025, officials suspected JS Group of violating SEBI PFUTP regulations.

Regulatory Actions and Responses

Following suspicions of regulatory violations by February 6, 2025, NSE issued a caution letter to Jane Street Singapore Pte. Ltd., urging them to refrain from potentially fraudulent trading patterns. Despite this warning, by May 15, 2025, JS Group continued to maintain large cash-equivalent positions in index options.

Cash equivalents are short-term investments easily convertible to cash and often used as collateral or for margin requirements in F&O trading. These instruments allow traders to earn interest or returns while participating in F&O markets.

The Jane Street Group employs algorithms to identify trading opportunities across more than 45 countries. Despite their global presence and technological prowess, they now face significant restrictions due to SEBI's findings and actions.

This situation underscores the importance of regulatory compliance in maintaining market integrity and ensuring fair trading practices across global financial markets.