Jane Street Resumes Derivatives Trading in India after SEBI’s Rs4,843 Crore Escrow Compliance

Moneylife Digital Team 22 July 2025

Investor Interest

Jane Street, the US-based proprietary trading giant, has been allowed to resume operations in India’s securities market after it complied with the Securities and Exchange Board of India’s (SEBI) conditions set out in an interim order issued earlier this month. SEBI confirmed on Monday that Jane Street has deposited 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.

The market regulator had previously 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.

Last week, SEBI confirmed the transfer of Rs4,843.57 crore, stating that the amount has been credited with a lien and clarified that contrary to media reports, Jane Street was not allowed to resume trading in the Indian stock market.

According to SEBI’s latest update, with the escrow compliance now in place, the restrictions imposed under clauses 62.2, 62.3, 62.4, 62.5, 62.7, 62.8, and 62.10 of the interim order shall cease to apply. However, the regulator has made it clear that Jane Street and its group entities must cease and desist from directly or indirectly engaging in any manipulative, fraudulent, or unfair trade practices. The firm is also barred from using any of the trading strategies or patterns identified in the 3 July 2025 order.

SEBI has directed stock exchanges to maintain close surveillance over Jane Street’s market activities to ensure strict adherence to regulatory norms. The exchanges have confirmed their compliance with these directions. Though SEBI has lifted some of the curbs, the investigation into Jane Street’s alleged manipulation is still underway and further action may follow, depending on the outcome.

Jane Street has confirmed its commitment to abide by SEBI’s conditions and the regulator reiterated its stance that it remains focused on upholding market integrity while following due process.

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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