India’s markets regulator, the Securities and Exchange Board of India (SEBI), escalated its investigation into U.S.-based high-frequency trading firm Jane
Street after concerns over inadequate data and continued complaints from market participants, The Economic Times reported, citing people with direct knowledge of the matter. According to ET, SEBI’s surveillance department had initially recommended closing the inquiry. However, the regulator’s top leadership was not satisfied with the robustness of the first examination, which concluded in December 2024. Instead, SEBI initiated a formal investigation towards the end of that month, granting it powers to seek additional information from Jane Street’s custodian bank and domestic trading partner. SEBI temporarily barred Jane Street from local markets on July 4, alleging market manipulation. The watchdog also imposed a $567 million penalty, which the firm has since deposited. Although Jane Street is technically allowed to resume trading in India, it has refrained from doing so, ET noted. The firm filed an appeal before the Securities Appellate Tribunal (SAT) on Wednesday, demanding access to the documents and complaints that triggered the investigation. SEBI continued receiving complaints from traders alleging manipulation of India’s benchmark indexes. One such complaint was filed on December 17 by UAE-based options trader Mayank Bansal, who told Reuters: “Communication between a market participant and the regulator is premised on confidentiality.” Legal experts said SEBI’s decision to escalate the matter was consistent with regulatory practice. “Earlier determinations, whether favourable or adverse, are set aside in favour of an independent investigation,” said Sumit Agrawal, a former SEBI official and founding partner of Regstreet Law Advisors, as quoted by ET. The regulator’s concerns intensified after Jane Street’s trading activity on May 15 reportedly netted it 3.7 billion rupees ($42.3 million). This prompted SEBI officers to work “overnight” in June to finalise their probe, culminating in the July 4 order.
