Jane Street's Appeal to SEBI

US quant trading firm Jane Street has taken a significant step by depositing Rs 4,843.58 crore into an escrow account, aiming to persuade the Securities and Exchange Board of India (SEBI) to lift the trading restrictions imposed on it. This move follows SEBI's interim order in a market manipulation case, where the firm is accused of orchestrating a scheme to manipulate India's derivatives market.

SEBI's Allegations Against Jane Street

SEBI has accused Jane Street of engaging in systematic market manipulation activities, allegedly accumulating profits of approximately Rs 36,500 crore. The regulatory body's investigation revealed that the firm employed aggressive trading strategies to artificially inflate and then depress prices of Nifty Bank component stocks and futures, benefiting their options holdings.

Impact on Indian Markets

The allegations and subsequent trading ban have had a noticeable impact on Indian markets, particularly affecting derivative trading volumes, which saw a reduction of about 20%. The weekly options expiry session experienced a significant downturn, with turnover decreasing by more than 21%.

Looking Ahead

SEBI is currently reviewing Jane Street's appeal, emphasizing its commitment to maintaining market integrity. The outcome of this review could have far-reaching implications for foreign trading firms operating in India's securities markets.