Jane Street seeks more time from Sebi to respond to July 3 order

The regulator lifted the trading ban on the HFT firm after it deposited ₹4,843.57 crore in an escrow account

US based high-frequency trading firm Jane Street has sought more time from the market regulator Securities and Exchange Board of India (Sebi) to respond to the watchdog’s order dated July 3.

 

The market regulator had given a 21-day period for the trading giant to respond to the allegations made in the ex-parte interim order which had directed impounding of around ₹4,843 crore of ‘illegal gains’.

 

“We are engaging constructively with Sebi and have sought an extension to respond to the interim order issued on July 3,” said a representative from Jane Street.

 

“Jane Street is committed to conduct that upholds the integrity of India’s capital markets and contributes to their continued development,” the statement added.  

 

The market regulator has lifted the trading ban on the high-frequency trading (HFT) after it deposited ₹4,843.57 crore in the escrow account. 

 

Jane Street has confirmed to the regulator that it will comply with the directions to cease and desist from engaging in any fraudulent, manipulative, or unfair trade practice.

 

The exchanges are closely monitoring any future dealings and positions of Jane Street and its group entities on an ongoing basis to ensure that they do not indulge in any manipulative activity. Meanwhile, the market regulator has expanded the probe to other indices such as Sensex and for other trading strategies.

 

In an earlier statement, the trading firm had said that it did not plan to take options positions immediately.

 

According to the Sebi order, Jane Street employed a two-part strategy: it aggressively bought Bank Nifty constituent stocks in both cash and futures segments to artificially inflate the index. It later unwound those positions while holding large short positions in index options, profiting from the subsequent decline.

 

Jane Street maintains that its trades were part of a standard “index arbitrage” strategy — exploiting price differences between related instruments to provide liquidity and maintain market efficiency. 

The timeline 

• Sebi had given 21 days time to Jane Street to respond to the interim order
• The trading firm has sought extension to respond; says is ‘engaging constructively’ with Sebi
• Trading ban on Jane Street was lifted after it deposited ₹4,843 crore in an escrow account
• Jane Street had confirmed to Sebi that it will cease and desist from engaging in any fraudulent or manipulative practice