These conditions will remain in effect until the market watchdog completes its ongoing investigation
High-frequency trading (HFT) giant Jane Street has been allowed to re-enter Indian markets after complying with the Securities and Exchange Board of India’s (SEBI) order to deposit Rs 4,844 crore in an escrow account.
The New York-based firm, known for its aggressive index options strategies, had been barred from trading in India earlier this month. According to a Business Standard report citing sources, SEBI officially lifted the ban last week via email after confirming the deposit had been made before the July 14 deadline.
While the firm is now allowed to trade again, it will not be business as usual. The National Stock Exchange (NSE) and BSE have been directed by SEBI to closely monitor Jane Street’s future positions and trading activity.
The regulator has also instructed Jane Street and its associates to avoid any manipulative trading patterns, particularly those flagged in SEBI’s interim order issued on July 3.
These conditions will remain in effect until the market watchdog completes its ongoing investigation, Business Standard reported.
SEBI’s probe centres around Jane Street’s alleged use of a two-part trading strategy involving Bank Nifty stocks. According to the regulator, the firm first bought large quantities of Bank Nifty constituent stocks in both the cash and futures markets to artificially drive up the index.
It then unwound those positions while holding massive short bets on index options, thereby profiting from the subsequent decline in prices.
Jane Street, however, has defended its actions, calling them a standard index arbitrage strategy, a common trading method where traders take advantage of price differences between related instruments.
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Sources told Business Standard that Jane Street representatives met with SEBI officials over the past week. Although the firm has regained market access, it has reportedly conveyed that it does not plan to resume options trading immediately.
In the meantime, SEBI is widening its investigation to check if Jane Street, or any other HFT firm, may have manipulated indices beyond Bank Nifty.
The regulator’s full investigation is expected to take several more months to conclude.
Jane Street has been one of the biggest players in India’s derivatives market. Between January 2023 and March 2025, the firm reportedly made Rs 43,289 crore in profits from trading index options.
Since the ban was imposed earlier this month, trading volumes in India’s futures and options (F&O) segment have dropped by nearly 20 percent, a space where Jane Street was a major participant.
Industry insiders say Jane Street’s return may be more cautious this time. “It may have to scale back its high-risk strategies, which could give an advantage to rival HFT firms,” an executive at a competing trading firm told Business Standard. “It’s not earning the kind of profits it used to.”