Jane Street allowed to trade in Indian derivatives market: Sebi after lifting ban 

Markets regulator Sebi has lifted the trading ban it imposed on July 3 on New York-based proprietary trading giant Jane Street, after the firm last week deposited Rs 4,843.5 crore. In its statement, Sebi said that Jane Street will have to comply with the SEBI order & will not engage directly or indirectly in manipulation or unfair trading.

“Upon compliance with the directions in clause 62.1 (creation of an escrow account with a lien marked in favor of SEBI, for an amount of Rs 4,843,57,70,168/-), the directions stipulated in clauses 62.2, 62.3, 62.4, 62.5, 62.7, 62.8, and 62.10 of the interim order shall cease to apply,” Sebi said. 

The earlier restrictions—such as curbs on accessing the securities market, freezing of securities, and limitations on bank accounts and asset transfers—will no longer apply, according to Sebi’s order.

However, in a press release, Sebi stated that Jane Street entities have been directed to cease and desist from engaging, either directly or indirectly, in any fraudulent, manipulative, or unfair trade practices. This includes refraining from any activity that may violate regulatory norms or involve trading patterns flagged in the interim order. Sebi also noted that the entities have confirmed their commitment to comply with these directives.

Additionally, stock exchanges have been instructed to keep a close watch on all future dealings and positions of the Jane Street Group to ensure that they do not, in any way, engage in manipulative activities—including through trading strategies referenced in the interim order—until Sebi completes its investigation and any resulting proceedings. The exchanges have confirmed their compliance with this directive, Sebi added.

Jane Street was prohibited from trading in the securities market and had its bank account debits frozen, along with being directed to deposit the penalty amount into an escrow account, after the capital markets regulator found it guilty of manipulating both the stock and derivatives markets.

The firm had allegedly pushed up Bank Nifty in the cash market while simultaneously taking large put option positions—nearly seven times the size of its cash exposure. These options were later offloaded in the second half of the trading session, dragging the index down and generating profits. Sebi, in its interim order, noted that a detailed investigation is underway.