Sebi bars US trading firm Jane Street from Indian markets, orders Rs 4,840 crore freeze over alleged Nifty manipulation

The markets regulator Securities and Exchange Board of India (SEBI), on Friday barred U.S.-based trading giant Jane Street Group and its affiliates from accessing the country’s securities market, accusing the firm of deploying manipulative strategies to distort the Nifty 50 index and rake in massive profits from derivatives.

In a scathing 105-page interim order, SEBI said it would impound Rs 4,840 crore in alleged illegal gains and directed banks to freeze withdrawals from Jane Street-linked accounts without its permission.

“The entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly,” the order said.

The action comes after months of scrutiny into Jane Street’s trades in India’s equity derivatives market, where the firm generated over Rs 36,500 crore in net profits between January 2023 and March 2025. Of this, Rs 43,289 crore came from index options alone, according to data from the National Stock Exchange (NSE) cited in the order.

SEBI alleged that the Jane Street Group repeatedly used complex, high-volume strategies, particularly during weekly expiry days, to manipulate the underlying index levels of Bank Nifty and Nifty 50. These strategies misled a massive number of retail options traders who track the index to gauge market direction.

One of the techniques cited was an “Intra-day Index Manipulation” strategy, under which the firm allegedly bought shares of key Bank Nifty constituents worth Rs 4,370 crore in the morning session of January 17, 2024, to artificially inflate the index, only to reverse these trades later in the day while holding larger bearish options positions.

On that single day, Jane Street earned a staggering Rs 734.93 crore in profits from Bank Nifty options, the regulator noted.

SEBI said it had already issued a cautionary letter to Jane Street in February 2025 through the NSE, warning it against such trading patterns. Despite this, the firm continued with similar trades, “in disregard of the caution letter from the Exchange… and JS Group’s own commitments.”

The regulator found that out of the 18 trading days it analyzed in detail, Jane Street deployed this intraday manipulation strategy on 15 of them, while a separate “Extended Marking the Close” strategy was observed on the remaining three.

Rising global scrutiny

Jane Street's operations in India, one of the world’s largest derivatives markets by contracts traded, had previously attracted attention after a court battle in the U.S. with Millennium Management revealed the firm earned $1 billion in 2023 from Indian options alone. The firm made $2.3 billion in equity derivatives revenue from India in 2024, Bloomberg reported.

SEBI’s order further underscored the imbalance in India’s booming derivatives markets. It said that while foreign and proprietary traders earned over Rs 610 billion in FY24 through algorithms and high-frequency strategies, retail participants—who form the bulk of options traders—incurred equivalent losses.

NSE closed its probe, But SEBI pushes ahead

While the National Stock Exchange closed its own investigation into Jane Street’s trades in May after a response from its local trading partner Nuvama Wealth, SEBI has opted for a much harder line.

Banks have now been instructed to freeze any debits from accounts held by Jane Street’s Indian affiliates, JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd, pending further proceedings.