Street Signs: Phantom trader returns, compliance burden on fund managers

The phantom trader returns to the floor

 

With the Securities and Exchange Board of India formally lifting its ban on Jane Street, there’s renewed curiosity around the trading strategies the high-frequency trading giant might now deploy. Market watchers are dissecting shifts in trading patterns before, during, and after the ban. One market post pointed out that Jane Street’s earlier trades often pushed option prices to settle near levels seen in the early hours of trade — a pattern that vanished during the ban and has now resurfaced. It’s still unclear whether Jane Street is fully back in action, but derivatives turnover has climbed since the restriction ended. On Thursday — the weekly expiry day for Nifty contracts — both turnover and contracts traded jumped 20 per cent from the previous week’s expiry. 

Grey market goes neon ahead of IPO rush 

This is shaping up to be one of the busiest initial public offering (IPO) weeks of 2025, with seven public issues set to close. The pace has set off a flurry in the grey market, where participants are reporting record trading volumes. Grey market premiums are running high across most upcoming listings. For instance, Aditya Infotech shares are trading at a 32 per cent premium, while National Securities Depository, Sri Lotus Developers, and Laxmi India Finance are each quoting at about 20 per cent over their respective price bands. GNG Electronics, whose IPO wrapped up last week, is commanding a premium of over 40 per cent. “If the new listings live up to these grey market expectations, IPO momentum could stay brisk through August,” said one market observer. 

Grip eases, gaze holds for fund managers 

A new institutional mechanism to check market abuse is expected to relax certain compliance rules for fund managers starting next month, including the requirement to record or hold face-to-face meetings during market hours. However, phone call recording will still be mandatory. Sources say the changes may not apply evenly across the board, as some fund houses could choose to stick with tighter controls. Introduced last August, the institutional mechanism shifts the onus of detecting and preventing market abuse onto asset management companies (AMCs) and their senior leadership. AMCs will now need to implement alert-based surveillance systems that scan emails, chats, access logs, and even closed-circuit television footage to detect suspicious activity.