The Securities and Exchange Board of India (SEBI) launched a proper investigation into Jane Street’s buying and selling practices regardless that its surveillance division had advisable in any other case due to continued complaints from market individuals, two sources with direct data of the matter stated.
SEBI additionally believed inadequate knowledge was used within the preliminary probe into the U.S. high-frequency buying and selling agency, the individuals stated, amid fears it might need “manipulated” the inventory and bond markets.
The apex regulatory physique on July 4 quickly barred the agency from native markets on allegations of market manipulation, which the corporate has denied.
SEBI imposed a $567 million penalty on Jane Street, which the corporate has deposited. While it will probably restart buying and selling in India, it has kept away from doing so, Reuters reported final month.
On Wednesday (September 3, 2025), Jane Street filed an enchantment earlier than the Securities Appellate Tribunal (SAT) in opposition to SEBI searching for paperwork and knowledge which led to the formal inquiry.
The agency questioned why the regulator went in opposition to the recommendation of its personal surveillance division that the inquiry in opposition to Jane Street must be closed and sought paperwork that supported the regulator’s change of stance.
The enchantment, initially scheduled for Monday (September 8, 2025), will now be heard by the Tribunal on Tuesday (September 9, 2025) after a authorities change to the date of the Eid vacation.
Emails despatched to SEBI and Jane Street searching for feedback weren’t answered. The agency had earlier declined to touch upon its enchantment.
According to the 2 sources, SEBI’s prime management was not glad with the robustness of the primary examination concluded by its personal surveillance division on December 11 and selected to provoke a proper investigation in direction of the tip of December 2024, which provides it powers to search knowledge from the buying and selling agency’s custodian financial institution and home buying and selling accomplice.
A proper investigation is a quasi-legal course of beneath Indian regulatory guidelines, in distinction to an inside enquiry.
According to Sumit Agrawal, a former SEBI official and founding accomplice of Regstreet Law Advisor, as soon as a proper investigation is initiated any prior conclusions lose their weight, and the method begins anew.
“Earlier determinations, whether favourable or adverse, are set aside in favour of an independent investigation,” he stated.
The regulator had additionally continued to obtain complaints from market individuals of manipulation of India’s key indexes, the 2 individuals stated.
The agency in its enchantment has sought copies of those complaints.
One such criticism was filed by UAE-based choices dealer Mayank Bansal on December 17, who instructed Reuters that “communication between a market participant and the regulator is premised on confidentiality”.
The division which oversees India’s market regulation later that month advisable opening an investigation to convey finality to the matter, the primary supply stated.
SEBI tasked a brand new workforce with reviewing the agency’s buying and selling exercise over a for much longer timeframe than the buying and selling knowledge examined by its surveillance division. The knowledge was additionally rather more detailed, the 2 individuals stated.
While the regulator continued the investigation, it issued a warning to the agency by means of Indian exchanges in February that it ought to chorus from taking massive positions on days when derivatives contracts expire, in accordance to the regulator’s 4 July order. Price volatility can usually spike round these expirations.
But the agency’s buying and selling efficiency on May 15 which earned it 3.7 billion rupees ($42.28 million), compelled SEBI’s hand to cross an order, stated the primary supply.
“SEBI officers worked overnight to finish its investigation in June, which ultimately led to passing the order,” the primary individual stated.
($1 = 87.5060 Indian rupees).
