Explained: What is Jane Street and why Sebi barred it from markets?

Sebi has barred US trading firm Jane Street from Indian markets pending the return of alleged unlawful gains worth Rs 4,840 crore. Here's a detailed explainer on the case.

The Securities and Exchange Board of India (Sebi) has temporarily barred global proprietary trading firm Jane Street from accessing the domestic equities market. The ban will stay until the US firm returns the alleged unlawful gains of ₹4,840 crore.

Here’s an explainer on the market marker. 

 

What is Jane Street? 

Founded in 2000 by a team of traders and technologists in New York, Jane Street is a global proprietary trading. It employs more than 2,600 people in five offices across the United States, Europe, and Asia and trades in 45 countries.

 

How big is Jane Street? 

In 2024, it made $20.5 billion in net trading revenue, more than double that of the previous year. Jane Street’s net revenue in trading surpassed that of Bank of America and Citigroup in 2024, thanks to its expansion into global markets like India.

 

 

How much profits did it make in India? 

According to the Sebi order between January 1, 2023 and March 31, 2025, Jane Street made a profit of ₹36,502 crore-- not all of it is illegal. The break of the gains are: a profit of ₹ 43,289 in index options, about ₹900 crore in stock options and losses of ₹7,208 in stock futures and ₹288 crore in the cash segment.

 

Why did Jane Street sue its rival Millennium Management in US court, and what is its India link?

 

Last year, Jane Street sued its rival, Millennium Management, and its former employees, Douglas Schadewald and Daniel Spottiswood. In its suit, Jane Street alleged that its former employees stole a confidential trading strategy to use in their new jobs at Millennium. 

 

Jane Street’s lawyer claimed that the strategy stolen by its former employees was its most profitable one and stated that it earned $1 billion in 2023 using that strategy in a particular market. 

 

The lawyers for Millennium, Schadewald, and Spottiswood inadvertently identified India as the market during their arguments. Jane Street further claimed that its profits from using the strategy fell 50 per cent in March 2024 due to its competitor using the same strategy. The $1 billion figure became a topic of heated discussions and triggered a regulatory probe in India.

 

Why did Sebi probe Jane Street? 

Sebi’s probe against Jane Street is part of its efforts to mitigate losses for individual derivative traders. In April 2024, Sebi analysed trades done by Jane Street following media reports of unauthorised use of proprietary trading strategies. Later, NSE was tasked with examining the order conducted by the market maker. In February this year, NSE issued a caution letter to Jane Street to refrain from a particular trading strategy. Despite that the trading firm continued to take large positions in the market.

 

What took Sebi so long to act against Jane Street? 

The case was highly complex for Sebi to crack. It required processing of complex data and establishing patterns to ensure a strong case was created. Also, Sebi had to rely on not just intra-departmental help but also required a lot of inputs from third-parties like stock exchanges. 

 

What is fuelling the interest of firms like Jane Street in India? 

High-frequency trading firms, such as Jane Street, have entered India due to the post-pandemic boom in equity derivatives trading, primarily driven by retail investors. Jane Street and other foreign funds -- which utilise algorithms and sophisticated trading strategies-- have generated billions in profits. They had been riding the post-pandemic derivatives trading boom at the expense of India's retail investors.