Market regulator Securities and Exchange Board of India will continue its investigations in the Jane Street matter, with additional derivative contracts–futures and options (F&O)–and patterns to be probed, Zee Business learned from sources. The update comes at a time when the capital market watchdog has barred the US-based securities trading firm from Dalal Street until further orders, seizing impounded alleged illegal gains to the tune of Rs 4,843 crore over alleged stock manipulation through F&O positions.
This marks one of the regulator’s toughest actions against a foreign trading firm in the country.
In its interim order, dated July 3, SEBI stated that Jane Street and its related entities will no longer be able to participate in the domestic securities market.
As per the order, some of Jane Street’s trading strategies were found to be manipulative, causing losses to retail investors. Related entities–belonging to the JS Group–are barred from the country’s securities market. These entities will no longer be able to buying, selling or dealing in securities in any manner directly or indirectly indefinitely, according to SEBI.
It said the ban will stay in place until a final order is issued after the completion of investigations.
Sources said that the order is not a show-cause notice (SCN) and investigations into the matter will continue going forward.
Details of SEBI investigations into Jane Street’s dealing in derivatives
As of date, SEBI is learned to have found prima facie manipulation in Nifty Bank contracts for 18 days and Nifty50 contracts for three days. The period of investigation was from January 2023 to March 2025, according to the sources.
Every algo user is responsible for the output of their algorithm. Also, the enforcement action is unlikely to have a major impact on the market, with the delta-based limits in place, they said.
Better enforcement of existing rules is essential, but more rules cannot make up for poor enforcement, noted the sources.
In the second phase of consultation, SEBI withdrew the proposal for intraday limits, they said.
“We believed that the objectives could be met through improved monitoring and enforcement… This order clearly reflects and underscores that belief. We will continue to monitor Indian F&O markets from the standpoint of investor protection, market stability, and capital formation,” said the sources.
Recently, retail participation in index options trading on expiry days has somewhat declined. Yet, nearly 90 per cent of retail investors continue to lose money, the sources noted.
