NSE closes probe into Jane Street trades flagged for unusual activity

By Chiranjivi Chakraborty, Anto Antony and Alex Gabriel Simon

 

India’s largest stock exchange has closed an investigation into irregular trades by Jane Street Group, one of the most active foreign players in the country’s derivatives markets, according to people familiar with the matter.

 

The National Stock Exchange of India Ltd., which operates the world’s biggest equity derivatives bourse, in January flagged certain trades by high-frequency trading firms including Jane Street, people with direct knowledge of the matter said. Moneycontrol had reported of the proceedings earlier. 

 

The transactions in question involved rapid reversals of trades, sometimes at prices far above or below prevailing market rates, the people said, asking not to be named as the information is private.

 

 

The trades raised concerns of market manipulation at a time when the nation’s securities regulator is scrambling to stay ahead of the rapid boom in India’s derivative market, where Jane Street is said to conduct majority of its trades.

 

The US-based market maker’s operations in India came under a global spotlight last year after a court battle with Millennium Management revealed it earned $1 billion trading in Indian equity derivatives.  

 

The NSE told Jane Street’s local trading partner Nuvama Wealth Management Ltd. in a letter dated April 30 that the investigation has been closed following a response to an initial notice sent early this year, a copy of the letter reviewed by Bloomberg showed. 

 

Jane Street declined to comment on the flagged trades and the content of the letter. Spokespeople for both the NSE and Nuvama didn’t respond to requests for comment.

 

The NSE as a first-line stock regulator in India undertakes real-time position monitoring and risk management for the futures and options market through its clearing house NSE Clearing Ltd., according to its website.