MUMBAI, September 3 — U.S.-based high-frequency trading firm Jane Street has formally filed a case against the Securities and Exchange Board of India (SEBI), contesting allegations of market manipulation in India’s equity derivatives segment. The appeal was lodged with the Securities Appellate Tribunal (SAT), marking the firm’s first legal response to SEBI’s interim order issued in July 2025.
SEBI had accused Jane Street of executing a calculated strategy to distort the Bank Nifty index—a key benchmark tracking banking stocks—through simultaneous trades in cash and futures markets. According to the regulator, the firm artificially supported index prices during early trading hours while building short positions in Bank Nifty options, profiting from subsequent declines later in the day. The watchdog temporarily barred Jane Street from participating in Indian markets and froze ₹4,840 crore worth of its assets.
In its SAT filing, Jane Street argued that SEBI failed to provide access to critical documents and data necessary for its defense. The firm requested the tribunal to direct SEBI to disclose all relevant materials, stating that the withheld information is “undeniably relevant” to the case. Jane Street has denied any wrongdoing, maintaining that its index arbitrage strategy is standard and legal across global markets.
The case has drawn attention from financial and legal circles, given Jane Street’s significant footprint in India’s options market, where it reportedly earned profits exceeding ₹44,000 crore over the past two years. The firm is known for deploying complex algorithms and contrarian strategies, often taking large positions that contribute to market volatility.
Legal experts note that proving intent to manipulate markets—especially by proprietary trading firms—is notoriously difficult. While SEBI’s investigation spanned over two years, the tribunal will now assess whether the regulator’s actions were proportionate and procedurally sound.
Neither Jane Street nor SEBI has issued public comments on the ongoing litigation. The outcome of the SAT proceedings could have far-reaching implications for foreign institutional participation in India’s capital markets and the regulatory framework governing algorithmic trading.
