Jane Street market manipulation case: SAT to hear case on November 18, says report

The Securities Appellate Tribunal (SAT) has fixed the next hearing on Jane Street's appeal against the SEBI July interim order for November 18, said a report. The courtroom face-off between Jane Street Group LLC and the Securities and Exchange Board of India (SEBI) is expected to have a far-reaching implications for the global equity derivatives market. The outcome could set a precedent for other global quant trading firms such as Citadel Securities, IMC Trading, Jump Trading, Optiver, and Millennium that operate in India.

SAT asked SEBI to file a response within three weeks explaining why it cannot disclose additional documents in the Jane Street case, Reuters reported adding that the tribunal directed the market regulator to pause any personal hearings with the trading firm until the matter is heard again on November 18.

The US-based Jane Street group and its related entities were in July barred by the market regulator for unlawful gains earned from the alleged violations, amounting to Rs 4,843 crore. But SEBI cleared Jane Street to resume trading activity after the firm deposited $567 million (Rs 4,843.50 crore) into escrow accounts, in line with SEBI’s earlier directives.

Jane Street later filed an appeal with India's SAT against the SEBI, requesting access to crucial documents that Sebi has allegedly withheld.

The three-member Securities Appellate Tribunal (SAT) bench began hearing the matter today. Justice P.S. Dinesh Kumar headed the bench.The SEBI interim order accused the New York-based trading powerhouse of manipulative practices in India’s derivatives market. Jane Street had argued that Sebi denied it access to key documents needed for its defence. The firm aslo sought a stay on further regulatory action until the case is resolved.

SEBI recently introduced multiple measures since October 2024 to curb speculative activity in index derivatives, which initially dragged volumes in Q4FY25. However, a spike in volatility lifted trading activity in the first half of FY26. IIFL Securities said the recent remarks from the SEBI Chairman, suggesting a preference for longer-tenure contracts, have sparked speculation about the possible introduction of fortnightly or monthly expiries. Until regulatory clarity emerges, IIFL expects earnings visibility for exchanges and related businesses to remain clouded.

On Tuesday, Jane Street was exepcted to ask the bench to pause the investigation if the court concludes that Sebi is hindering its defence by withholding crucial documents. The first hearing is usually expected to set a roadmap, with the tribunal summoning SEBI to respond to the allegations at a later date.

The uptick in retail participation, coupled with SEBI’s concerns over rising retail losses, raises the possibility of more regulatory tightening. According to IIFL, while any fresh curbs could impact near-term trading activity, they may ultimately pave the way for a more transparent and efficient market structure, supporting long-term growth.

The market activity showed resilience in August and early September, with volumes surprising on the upside as both traders and institutions adjusted to the new regulatory environment, IIFL Securities said in a recent note. The strength in equity derivatives, however, brings its own risks.