Jane Street Rejects India Regulator's Accusations, Plans Legal Defense

Jane Street has responded to an interim order from India's Securities and Exchange Board of India (SEBI) accusing the firm of "index manipulation." Jane Street rejects the accusations and disputes SEBI's claims, stating that the regulator's report was "fundamentally mistaken" about its trades. The firm has defended its trading activity and intends to defend itself against the accusations.

Jane Street, a global trading powerhouse, has responded to an interim order from India's Securities and Exchange Board of India (SEBI) that accuses the firm of "index manipulation." The U.S.-based firm has rejected the allegations and disputes SEBI's claims, stating that the regulator's report was "fundamentally mistaken" about its trades. Jane Street has defended its trading activity and intends to defend itself against the accusations.

SEBI's order, issued on July 3, 2025, bars Jane Street from buying, selling, or otherwise dealing in securities in India and seizes $567 million of its assets. The regulator alleges that Jane Street manipulated the Bank Nifty index through large derivative positions, causing significant losses for retail investors. Jane Street has been given 21 days to respond to the order.

Jane Street's internal memo, reviewed by Reuters, expresses strong dissatisfaction with SEBI's actions, calling the allegations "extremely inflammatory." The firm claims to have made repeated efforts to communicate with SEBI but was "consistently rebuffed." Jane Street maintains that it has complied with all regulations and that its trading activity was not manipulative.

The case is significant for India's capital markets, which are under intense scrutiny due to rising concerns of manipulation. India leads the world in equity derivatives trading, accounting for nearly 60% of global volumes in April. As the case unfolds, Jane Street's formal rebuttal is expected to spark intense scrutiny and debate over the integrity of India's derivatives markets and the challenges of regulating global algorithmic traders in emerging economies.

References:
[1] https://www.republicworld.com/business/jane-street-to-fight-sebi-s-market-manipulation-charges-calls-allegations-inflammatory-report
[2] https://www.cnbc.com/2025/07/04/indian-regulator-bars-us-trading-firm-jane-street-from-accessing-securities-market.html
[3] https://diyatvusa.com/trading-firm-jane-street-banned-in-india-for-manipulating-securities/
[4] https://www.reuters.com/sustainability/boards-policy-regulation/india-regulator-bars-jane-street-accessing-its-securities-market-2025-07-04/