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US proprietary trading firm Jane Street and its Indian and Singaporean subsidiaries are facing scrutiny from the Securities and Exchange Board of India (SEBI) over their derivatives trading activities, specifically suspicions of manipulating benchmark stock indexes.
SEBI is investigating Jane Street’s trading practices over the past three years, focusing on their algorithmic trading strategies in India’s National Stock Exchange’s Nifty 50 and banking indexes. The probe was reportedly triggered by the firm’s unusually high profits from Indian derivatives positions, which were significantly greater than other trading firms, as well as complaints from other institutional firms.
The investigation aims to determine if there was a repeated pattern of Jane Street taking outsized derivatives positions in index constituents, particularly bank stocks, and then trading the index in the physical market to profit from their positions. This suggests a concern about “bait and switch” strategies or other forms of market manipulation that could distort prices and mislead other investors.

Video courtesy of KDPW

Video courtesy of KDPW