Jane Street is back! SEBI allows resumption of trading activity, says report

SEBI has allowed Jane Street to resume trading in Indian equity market after the global proprietary trading firm deposited $567 million or Rs 4,843.50 crore in escrow accounts, in compliance with its earlier directives, Reuters reported quoting two sources as saying. Business Today could not independently verify the news development. 

Jane Street operated in both cash and derivatives markets as a Foreign Portfolio Investor (FPI) and as a trading member. A couple of its entities were barred from trading in Indian market amid SEBI’s findings of alleged manipulation in the Bank Nifty index, which includes major Indian banking stocks. Preliminary observations pointed to a complex and unlawful trading pattern, allegedly enabled by Jane Street’s sophisticated trading infrastructure.

SEBI had asked Jane Street to deposit $567 million or Rs 4,843.50 crore unlawful gains in escrow accounts.

Jane Street complied and requested SEBI that, following the creation of this escrow account, certain conditional restrictions imposed under the interim order be lifted. The request was under examination by SEBI.

BSE, Angel One shares up

Following the latest development, shares of stock exchange BSE climbed nearly 3 per cent to Rs 2,506.70 level on NSE. The unlisted scrip of NSE was, on the other hand, quoting at Rs 2,220 apiece in the unlisted market, InCred Money suggested.

Stock broker Angel One Ltd added 1.88 per cent to Rs 2,727.65. Anand Rathi Wealth Ltd was down 0.87 per cent at Rs 2,595.50. "On the potential impact of Jane Street on volumes, the management has indicated that there will be no effect on the upcoming Rs 1.5-2 lakh crore AUM pipeline," MOFSL said on Anand Rathi in a note.

Options trading in India fell to a four-month low following Jane Street Group's trading ban. The NSE reported a 40 per cent drop in derivatives premiums than the year's average for such days. For BSE, derivatives may drive 58 per cent of FY26 revenues, Jefferies suggested earlier.  In this segment, FPIs drive 3-4 per cent of turnover.

What was the interim order?

In its interim order, SEBI barred the New York-based firm and its related entities from buying, selling, or otherwise dealing in securities, either directly or indirectly. The regulator directed that unlawful gains of Rs 4,843 crore, allegedly made by JS Group entities through market violations, be impounded. The entities were instructed to deposit the amount in an escrow account with a scheduled commercial bank in India.

SEBI also asked stock exchanges to keep a close watch on all future transactions and positions of the JS Group, to ensure its entities do not engage — directly or indirectly — in any form of manipulative activity, including those resembling the patterns flagged in the order, till the completion of the investigation by SEBI and the consequent proceedings, if any.