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Jane Street toes Sebi line, deposits Rs 4,844 crore in escrow

Sebi yet to take a call on US-based firm's request to lift restriction

By Nasrin Sultana

Published: Jul 14, 2025 03:59:26 PM IST

Updated: Jul 14, 2025 04:06:51 PM IST

(File) The logo of the Securities and Exchange Board of India (SEBI) on the premises of its headquarters in Mumbai, India. Image: Shailesh Andrade / Reuters

Changing its earlier stance against markets regulator Securities and Exchange Board of India’s (Sebi) interim order, US-based trading firm Jane Street has complied with the order and deposited Rs 4,844 crore in an escrow account. “A sum of Rs 4,844 crore has been credited to an escrow account with a lien marked in favour of Sebi,” the markets regulator said in a press statement on July 14. Jane Street has said that it has made the deposit without prejudice to their rights and remedies, which remain available to them in law and equity.

The high-frequency trading firm has also requested Sebi to remove “certain conditional restrictions imposed under the interim order” since the amount has been deposited according to its directions. However, Sebi has not taken any decision following the deposit. “This request is currently under examination by Sebi in accordance with the directions of the interim order,” it said.

On July 3, Sebi had barred Jane Street Group companies from accessing Indian securities on alleged manipulation in India’s cash and derivatives market. It had also ordered the seizure of Rs 4,844 crore estimated as “unlawful gains” earned by the Group from the alleged violations.

Earlier, Jane Street had reportedly rejected Sebi’s allegations, informing its employees that it would contest the ban imposed by it and stated that it was “beyond disappointed” by the “extremely inflammatory” accusations.

In a 105-page interim order, Sebi said, “Jane Street Group was undertaking an intentional, well-planned, and sinister scheme and artifice to manipulate the cash and futures markets and hence manipulate the BankNifty index level, to entice small investors to trade at unfavourable and misleading prices, and to the advantage of the Jane Street Group.” The order said that between January 2023 and March 2025, Jane Street made a profit of Rs 43,289.33 crore from Index Options alone, while incurring cumulative losses of Rs 7,687.21 crore in stock futures, index futures and cash.

The most profitable trading day, January 17, 2024 (with profits of Rs 734.93 crore) was selected for detailed scrutiny. Sebi carried out a comprehensive examination of all trades executed by the Jane Street Group across cash, futures, and options segments to understand their nature, timing, and potential interlinkages.

Also read: The Jane Street Saga: Will retail activity take a hit?

“The detailed analysis of the trades of this day revealed the existence of a strategy (intraday index manipulation strategy) which appears to have been similarly deployed by the JS Group in 15 days out of 18 days covered,” the Sebi order said. “Prima facie, Jane Street Group strategically built or retained short Call or long Put positions in BankNifty options expiring the same day, and subsequently executed large and aggressive sell-side trades in underlying index constituents in stocks and futures in order to depress the BankNifty index in the closing minutes. The resultant lower expiry value directly increased the profitability of their disproportionately large outstanding BankNifty index options positions.”

Consequently, on February 6, the National Stock Exchange (NSE) issued a cautionary letter to Jane Street Singapore Pte Limited and its related entity, Jane Street Group Investments Pvt Ltd, noting that the group had been consistently engaging in trading patterns that raised serious concerns over market integrity, particularly around the expiry of index derivatives.

Established in 2000, Jane Street Group is a global proprietary trading firm employing more than 2,600 people in five offices across the United States, Europe and Asia, and trades in 45 countries.

Reacting to the Jane Street ban, Tuhin Kanta Pandey, chairman of Sebi, has said that the markets regulator was watching it as a surveillance issue. “Surveillance both at the exchange and Sebi level will continue going ahead,” he said at an event after the order was passed on Jane Street.

Meanwhile, Madhabi Puri Buch, former chairperson of Sebi, has slammed criticism that the market regulator was slow to act against Jane Street. Describing the claims of regulatory inaction as a "false narrative", in a note, Buch said that Sebi’s intervention began well before the matter became public. “In actuality, identification of index manipulation by Jane Street and initiation of numerous actions, including a cease-and-desist instruction to Jane Street, were carried out by Sebi between April 2024 and February 2025,” Buch said. Her term as Sebi chief ended on February 28, 2025.