Jane Street Challenges SEBI Order On Index Manipulation Before Securities Appellate Tribunal

High frequency trading firm Jane Street has challenged the SEBI order on index manipulation before the Securities Appellate Tribunal, documents reviewed by NDTV Profit show.

The US-based trading firm claims that India's market watchdog did not provide complete and relevant trade data, and is suppressing crucial documents.

The firm claims SEBI has not provided complete and relevant trade data and rejected repeated inspection requests. Jane Street alleged that SEBI asked it to raise inspection grievances only at hearings scheduled on Sept. 8 and Sept. 15, 2025, which the firm says severely prejudices its case.

The appeal argues that SEBI has withheld annexures to its investigation report and correspondence with the National Stock Exchange (NSE), despite those records forming the basis of regulatory conclusions.

Jane Street points out that both SEBI's own investigation department and the NSE had previously found no evidence of price manipulation in its trades, but the regulator later shifted its stance by introducing a new theory of “Extended Marking the Close.” The high frequency trading firm also mentioned that these documents are important to file an official response to SEBI proceedings.

NDTV Profit had previously reported on July 25 that Jane Street had sought additional time from SEBI to file its official response in the ongoing investigation. During its last interaction with the regulator, the firm reportedly gave an undertaking to ensure compliance with all market norms.

NDTV Profit had also reported and that while the proceedings are undergoing, the firm is not engaging in active trading in the Indian markets despite being allowed to do so.

The firm highlights a series of SEBI–NSE communications in May 2025, where the regulator sought multiple new analyses, including:

1) Delta exposure files and trade data for specific days in January 2024.

2) Fresh analysis for four days previously disregarded under original criteria.

3) Graphs, backend documents, and code for generating “patch” analysis across strikes.

4) Replication of analysis for the top 20 profit days between July 2023 and August 2024.

Background

SEBI had barred Jane Street Group entities from accessing the Indian securities market and directed the impounding of Rs 4,843.57 crore in alleged unlawful gains from the group.

According to the interim order, Jane Street made gains to the tune of Rs 43,289.33 crore through trading in index options on Indian exchanges between Jan. 1, 2023, and March 31, 2025.

The market regulator passed the order as part of enforcement action. It applies to all Jane Street Group entities operating in India and restricts their ability to trade or participate in any market-related activity.

"Entities are restrained from accessing the securities market and are further prohibited from buying, selling, or otherwise dealing in securities, direct or indirect," SEBI said in an order.

The regulator asked that Jane Street entities jointly and severally deposit the amount into an escrow account with a scheduled commercial bank in India, which the firm did.

Timeline

In April 2024, the regulator acted upon some media reports informing on a legal matter of Jane Street Group. The issue pertained to unfair use of prop trading methods in the Indian stock market.

Thereafter, in July, the National Stock Exchange looked into the issue, and upon an interaction with SEBI in August, the group gave its side of the story. While the proceedings were still brewing up, the Indian markets saw one of the biggest derivatives trading norms rejigs in October.

SEBI issued a circular announcing a series of policy steps in order to address what was seen as overtrading in index options on expiry day.

On Nov. 13, 2024, the NSE examination report on JS Group's trading activity was submitted, and later, as per the order, the exchange observed what appeared to be abnormally high or low volatility on weekly index options expiry days.

Further, SEBI noted that there were certain entities consistently running what appeared to be by far the largest risks in ‘cash equivalent' terms in F&O, particularly on expiry days, the order read.

The group was found to have continued with these trading activities despite receiving a cautionary letter from NSE.