SEBI Bars Jane Street, Seizes $567 Million Over Alleged Index Manipulation

India’s Securities and Exchange Board (SEBI) has barred U.S. quantitative trading firm Jane Street and four affiliated entities from accessing the country’s securities market after an investigation concluded the group made unlawful gains by manipulating benchmark indices. The regulator has frozen all of the firm’s Indian accounts and ordered it to place Rs 4,843.57 crore (about $567 million) in an escrow account pending further proceedings.

SEBI’s 105-page interim order alleges that, on at least 17 trading days between January 2023 and March 2025, Jane Street aggressively bought large baskets of banking stocks and futures to push up prices, while simultaneously building even larger short positions in index options on the Nifty 50 and Bank Nifty. The firm then reversed the cash and futures trades, booking intraday losses that were more than offset by option gains. Over the period, the four Jane Street entities are estimated to have earned roughly $5 billion in India’s equity-derivatives market.

Jane Street said it “disputes the findings of the SEBI interim order” and plans to engage with the regulator. The company has 21 days to file objections and request a personal hearing. Corporate lawyer H.P. Ranina described the action as unusually forceful but cautioned that the conclusions remain provisional until the full investigation is completed.

Market participants warned of collateral damage if proprietary traders retreat. Zerodha founder Nithin Kamath noted that prop firms drive nearly half of India’s options volume and that a pull-back could dent liquidity and brokerage revenues. Shares of intermediaries reflected those concerns on Friday, with Nuvama Wealth tumbling 12% and BSE, Angel One and CDSL falling between 2.5% and 6%. The episode underscores growing regulatory scrutiny of high-frequency trading strategies in one of the world’s busiest derivatives markets.