This regulatory action follows a three-year investigation into Jane Street's derivatives trades, which began in early June 2025.

The Securities and Exchange Board of India (SEBI) has taken decisive action by barring US trading firm Jane Street from participating in the domestic securities market due to allegations of market manipulation.

As part of its interim order, SEBI has seized approximately 48.43 billion rupees (around $570 million) from Jane Street, representing unlawful gains from the alleged violations.

The investigation revealed that Jane Street employed a strategy of building aggressive positions in options, which allowed them to influence prices in the underlying stock market, particularly on index option expiry days.

Allegations indicate that Jane Street engaged in aggressive buying during morning hours, manipulating the index to create false market signals for other traders.

The allegations specifically involve the manipulation of an index of 12 major Indian banks in a complex and illegal manner.

The ban poses a significant threat to Jane Street, which reported over $2.3 billion in net revenue from Indian equity derivatives in 2024.

SEBI's actions are grounded in violations of anti-manipulation laws, aiming to mitigate systemic risks and protect fair market conditions.

This case reflects a global trend of increasing scrutiny on HFT firms, with similar regulatory actions observed in countries like Brazil and South Africa.

Investors are now advised to reassess their reliance on high-frequency trading (HFT) firms and consider shifting towards more regulated liquidity providers, such as traditional brokers or ETFs.

This case signifies a shift in how emerging markets view high-frequency trading, highlighting the associated risks and the need for stricter regulations.

SEBI's interim order emphasizes ongoing monitoring of Jane Street's dealings to prevent further manipulative activities and maintain investor confidence.