Jane Street Defends India Trading Activity and Blasts Regulator | Company Business News

(Bloomberg) — Jane Street Group LLC told its employees that India’s securities regulator made “many erroneous or unsupported assertions” about its trading activity in the country, and the firm intends to defend itself against the accusations. 

In an email to staffers over the weekend, the American proprietary trading firm and market maker said it strongly rejects the premise and substance of an interim order from the Securities and Exchange Board of India that accused it of “index manipulation.” 

The regulator last Friday temporarily barred Jane Street from accessing India’s securities market, and said it would seize 48.4 billion rupees ($564 million) in alleged “unlawful gains.” Jane Street made the equivalent of about $4.3 billion in overall trading gains between January 2023 and March 2025, according to SEBI. 

“We reject the premise and the substance of the Order in the strongest possible terms,” Jane Street said. “It’s deeply upsetting to see the firm mischaracterized in this way,” it added. 

The firm said SEBI’s report used extremely inflammatory language and was “fundamentally mistaken” about Jane Street’s trades. It is preparing a formal response to the regulator and also assessing its legal options. SEBI didn’t immediately respond to a request for comment on Tuesday. 

SEBI had said the firm had disregarded attempts by the regulator and exchanges to change its behavior — which Jane Street also disputed in its email. 

The firm said it had sought to engage with SEBI and had been responding to its queries since August 2024. Jane Street also said that after receiving letters from two Indian stock exchanges in February this year, it turned off trading until it could better understand their concerns. 

Senior Jane Street leaders from Hong Kong and New York flew to Mumbai and met with representatives of the National Stock Exchange of India Ltd. Following that, the firm made changes to its trading “to address their preferences,” it said.

“Since February, we have made ongoing efforts to communicate with SEBI and have been consistently rebuffed,” it said, adding that the regulator didn’t respond to the firm’s requests to discuss their concerns. 

SEBI’s 105-page report listed various instances of what it alleged was index manipulation by Jane Street. 

It said that on Jan. 17, 2024, the firm had traded aggressively to push up the underlying cash and futures market prices on the day that weekly index options tied to the NSE Nifty Bank Index were expiring. It said Jane Street heaped on large amounts of bearish options trades, and subsequently reaped large profits from unwinding some positions and letting others expire. 

Jane Street said that what the regulator called “intraday index manipulation” was an example of basic index arbitrage trading, which the firm said was common in financial markets and a way to bring prices of related instruments in line with each other. 

It said there was a large divergence between the price of the Nifty Bank Index in the options markets and in the stock market on that day in January 2024, and Jane Street traded “in a direction consistent with closing that gap.” 

SEBI’s allegations of index manipulation “consistently reflect a misunderstanding of standard hedging practices and the interrelationships between derivative and underlying markets,” Jane Street said.

The firm said its trading activity is “unambiguously good for the health of financial markets: in the absence of participants like Jane Street, there would be no economic link between the Indian derivatives market and the underlying economy,” the email said. 

“We take pride in the role we serve in markets around the world, and it’s painful to have our firm’s reputation tarnished by a report based on so many erroneous or unsupported assertions,” it told employees. “You all deserve to feel proud of your work here.”

–With assistance from Chiranjivi Chakraborty.

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