Jane Street Seeks More Time To Reply to SEBI's 3rd July Interim Order

Moneylife Digital Team 29 July 2025

Investor Interest

Jane Street, the US-based proprietary trading giant, has requested more time to respond to the interim order passed by Securities and Exchange Board of India (SEBI). Last week, after depositing Rs4,843.57 crore into an escrow account with a lien marked in favour of the regulator, thereby meeting the requirements of clause 62.1 of the 3 July 2025 interim order in the case of index manipulation, Jane Street was allowed to resume operations in India. Jane Street was asked by SEBI to respond to the interim order in 21 days.

In an email statement, the proprietary trading giant says, “Jane Street is committed to conduct that upholds the integrity of India’s capital markets and contributes to their continued development. We are engaging constructively with SEBI and have sought an extension to respond to the interim order issued on 3 July 2025.”

Given the gravity of the situation, in its interim order, SEBI had directed Jane Street group entities, JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd and Jane Street Asia Trading Ltd to deposit their alleged illegal profits of Rs4,843 crore in an escrow account and barred them from trading in Indian securities markets, pending further investigation. The order noted that, while a final determination may take time, interim restraints are necessary to safeguard market integrity. SEBI also acknowledged that the balance of convenience lies in restricting the group’s market access temporarily rather than imposing an indefinite ban at this stage.

The entities had been granted 21 days to respond and request a personal hearing. SEBI’s final ruling will depend on the strength of their defence and further analysis.

The market regulator had banned Jane Street from accessing the securities market, frozen debits from its bank accounts and imposed restrictions on asset transfers, citing serious violations involving market manipulation. SEBI had alleged that Jane Street distorted the Bank Nifty index by artificially inflating it in the cash market while, simultaneously, building disproportionately large put option positions—approximately seven times its exposure in the cash segment. These positions were later offloaded in the second half of the trading session, dragging the index downward and generating substantial profits.

Later, SEBI confirmed the transfer of Rs4,843.57 crore, stating that the amount has been credited with a lien. Jane Street was then allowed to resume operations in India’s securities market after it complied with the SEBI conditions set out in the interim order.

SEBI’s explosive 3rd July interim order had accused Jane Street and affiliates of 'massively rigging' India's derivatives market, specifically targeting Bank Nifty options. The order alleged that the firm employed high-frequency trading (HFT) strategies to manipulate prices, thereby generating unlawful gains at the cost of market integrity.

As reported by Moneylife, SEBI’s investigations uncovered that Jane Street’s algorithms—programmed for latency arbitrage and aggressive quote stuffing—disrupted fair price discovery during the expiry hours of Bank Nifty derivatives. The scheme allegedly exploited millisecond-level speed advantages to front-run other market participants and trigger misleading price signals.

SEBI’s interim order named two of Jane Street’s India-based entities—Jane Street India Pvt Ltd and Jane Street Technologies Pvt Ltd—alongside its foreign affiliates. It found that the group collectively made wrongful gains totalling Rs4,843.57 crore between 2021 and 2023. These profits have now been sequestered in escrow.

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