Jane Street Likely To Re-Enter Indian Stock Market But Curbs Will Apply — Profit Exclusive

Jane Street is likely to re-enter the Indian stock market, but restrictions against the US-based trading firm will likely be applied, sources told NDTV Profit on Monday.

The Securities and Exchange Board of India has written to the exchanges, asking in what manner Jane Street can be allowed to re-enter Indian markets. The bourses are drafting their reply, the persons familiar to the matter said.

They are likely to come up with a set of guidelines to be followed by Jane Street, and the restrictions that will remain on it.

The regulator has also sent a notice to Jane Street, saying that they are going to be allowed to re-enter the Indian market. The development comes after the regulator also has a meeting with the representatives of the high frequency trading firm, people in the know mentioned.

The Securities and Exchange Board of India 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 SEBI's order, Jane Street earned Rs 43,289.33 crore in profits 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 has asked Jane Street entities to jointly and severally deposit the amount into an escrow account with a scheduled commercial bank in India. The same was done by the firm.

The 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.