SEBI Bans Jane Street from Indian Markets
The Securities and Exchange Board of India (SEBI) has temporarily banned Jane Street, a U.S. high-frequency trading firm, from participating in India’s securities markets. It has also frozen about ₹4,700 crore confiscated from the firm, stating it used manipulative tactics in derivatives trading to profit unfairly.
Key Allegations
- Jane Street reportedly artificially boosted the Bank Nifty index, then reversed trades to cash in on options positions.
- The firm earned over ₹35,000 crore in India between January 2023 and March 2025.
- Severe retail losses—about 90% of small traders lost money, while large firms profited.
How SEBI Is Responding
- Investigation now includes other indexes and exchanges.
- Introduced new rules: larger lot sizes, fewer weekly expiries, and stricter HFT oversight.
- SEBI gave Jane Street 21 days to respond, with a route to appeal.
Tips for Retail Investors
- Limit high-leverage derivatives trades, especially around index expiries.
- Stay alert: HFT firms may front‑run orders or dominate price moves.
- Spread out trades and avoid crowded expiry dates.
- Learn about risks and use market safeguards, such as stop-loss orders.
SEBI’s crackdown is a reminder: while HFT brings liquidity, it also creates an uneven field. Indian retail investors should be cautious about algorithm-driven markets and protect themselves accordingly.