Sebi asks Jane Street to respond after sharing trade data in market manipulation case: Report

Capital markets regulator Securities and Exchange Board of India (Sebi) told a court that it has shared with Jane Street Group LLC the trade logs it relied upon for its preliminary order against the Wall Street trading firm, and has asked it to respond to the allegations of market manipulation, news agency Bloomberg reported on Wednesday.

Sebi has provided details of the actual trades, including their timing, quantity and prices, according to Sebi lawyer Gaurav Joshi, as cited in the report.

The development came after Jane Street's lawyer had argued until Monday that most of the information in the trade logs shared by Sebi was redacted, the report said.

According to the report citing Sebi's counsel, the regulator has withheld names and tax identification of counterparties, and will not share additional details because it did not base the probe on those records.

The trades are central to the regulator's allegation that Jane Street influenced the pricing of stocks in the NSE Nifty Bank Index, a closely watched benchmark that serves as the foundation for heavily traded options contracts.

The outcome of the dispute could shape global trading firms’ perception of how high-frequency traders would be regulated in one of the world's largest derivatives markets.

As per the report, Jane Street has been seeking additional documents, including Sebi's communication with the National Stock Exchange (NSE), that led to the investigation.

The case relates to Sebi's July 3 interim order, in which the regulator accused US-based trading firm Jane Street and its group entities of manipulating Nifty Bank through a two-part trading strategy. Sebi alleged that the entities made unlawful gains of around Rs 4,843 crore through the alleged manipulation.

The regulator had temporarily barred the entities from trading in India. The restriction was lifted on July 18 after Jane Street deposited the alleged gains in an escrow account.

Jane Street has denied Sebi's allegations, maintaining that its trading activity represented conventional index arbitrage rather than market manipulation.