India’s securities regulator has barred US-based trading firm Jane Street from participating in its markets, citing allegations of index manipulation that SEBI (Securities and Exchange Board of India) says harmed retail investors and disrupted market integrity, Reuters reports.
In an interim order issued July 3, SEBI accused Jane Street and its affiliated entities (collectively referred to as the JS Group) of manipulating the Bank Nifty index—a benchmark comprising 12 major financial firms—by executing a series of complex derivative trades that created misleading impressions of market activity.
According to the regulator, Jane Street used two key strategies. The firm allegedly bought large quantities of index constituents in the cash and futures markets early in the day to push up the index value, while simultaneously taking large short positions in index options. Later, it reportedly reversed its trades to capitalize on price swings created by its earlier activity. SEBI said this pattern influenced settlement prices in ways that favored Jane Street’s positions and caused losses for smaller investors.
SEBI’s interim measures include freezing $567 million (48.4 billion Indian rupees) in what it described as “unlawful gains” and directing Jane Street to deposit the amount into an escrow account. The firm has also been barred from buying, selling, or otherwise dealing in Indian securities until further notice, though it will be allowed to unwind existing positions gradually to avoid market disruption.
Jane Street responded by disputing the findings, saying it plans to engage with the regulator and remains committed to complying with laws in all jurisdictions where it operates. The company has the option to challenge the order through India’s Securities Appellate Tribunal or submit objections within 21 days.
The action marks one of SEBI’s most forceful interventions against a foreign market participant. Jane Street began its India operations in late 2020 and, according to SEBI, earned approximately $4.3 billion in profit from January 2023 to March 2025 on trades in the country.
India has become a hotbed for derivatives trading, now accounting for nearly 60% of global equity derivative transactions, according to the Futures Industry Association. This prominence has drawn interest from a growing number of global trading firms. However, the regulator emphasized that not all foreign players are under suspicion and that its action was specific to the alleged misconduct by Jane Street.
The market impact of SEBI’s order has so far been contained. Officials confirmed the timing of the announcement—after a weekly derivatives cycle expired—was intended to limit volatility. Recent regulatory changes, including tightened rules on derivatives positions, are also expected to reduce potential market disruptions.
