Jane Street Barred From India Market Over $570 Million Alleged Gains

Jane Street Group LLC, a prominent U.S. market maker, has been temporarily barred from accessing India's securities market by the Securities and Exchange Board of India (SEBI). This action follows allegations of index manipulation, which has resulted in a significant setback for the firm that had accumulated $4.3 billion in trading gains over a two-year period.

SEBI has ordered the seizure of 48.4 billion rupees ($570 million) from Jane Street, claiming this amount represents the total of “unlawful gains” made by the firm. Jane Street has disputed these findings and plans to engage further with the regulator. The interim order, issued by SEBI board member Ananth Narayan, highlights the regulator's determination to curb unfair trading practices.

Jane Street is one of the most active foreign players in India's derivatives market, which is the world’s largest by contracts traded. The firm's operations in India came under scrutiny last year following a court battle with Millennium Management, which revealed that Jane Street had earned $1 billion from trading in Indian equity derivatives. This disclosure triggered SEBI's investigation, which continued despite the National Stock Exchange of India Ltd. closing a separate probe into irregular trades by the firm.

According to the SEBI order, Jane Street made approximately 365 billion rupees ($4.3 billion) in overall gains from trading in Indian derivatives and the cash market between January 2023 and March 2025. SEBI alleged that Jane Street used a large amount of funds on weekly index options expiry days to influence price action in the futures and cash markets, where volumes are relatively low. This strategy allowed the firm to take significantly larger and more profitable positions in the highly liquid index options market by misleading and enticing a large number of smaller individual traders.

SEBI had previously warned Jane Street to avoid such trading practices as early as January this year. However, the investigation found that the firm continued to use this strategy in May. Pending a detailed investigation, Jane Street Group entities are immediately restrained from accessing the securities market and are prohibited from buying, selling, or dealing in securities. Banks have been directed to ensure no debits are made without SEBI’s permission in respect of the accounts held by these entities.

SEBI also stated that the restrictions can be lifted if Jane Street deposits the said amount in an escrow account at a designated bank in India. Jane Street disputes the findings of the SEBI interim order and will further engage with the regulator. The firm can contest the regulator’s “prima facie observations” within 21 days of the receipt of the order.

This action by SEBI signals a growing vigilance and willingness to assert control over foreign institutional activity making hefty gains in its derivatives market, particularly where such strategies blur the line between smart trading and market distortion. Global high-frequency trading and market-making firms have rushed to expand operations in India in recent years as the retail investor-led boom saw options premiums surge.

The retail frenzy has helped foreign funds and local proprietary firms that use algorithms, as they pocketed significant profits. However, retail investors have lost substantial amounts from trading futures and options. To protect them, SEBI has imposed several restrictions on trading options, including higher minimum investment limits and an increase in lot sizes. These measures have helped cool trading this year.

SEBI's action is expected to create a level playing field for all market participants, especially local players who were losing money. The regulator has also directed Jane Street entities to close out or square off any open positions they may have in exchange-traded derivative contracts within three months from the date of the order or at the expiry of such contracts, whichever is earlier. Jane Street has stated its commitment to operating in compliance with all regulations in the regions it operates in around the world.