Jane Street, an American quant trading firm, deposited approximately Rs 4,843.58 crore into an escrow account. Following this deposit, the firm has formally requested the Securities and Exchange Board of India (SEBI) to lift the ban imposed on its trading activities in Indian securities. SEBI acknowledged the deposit and confirmed Jane Street's request to remove certain restrictions.
Jane Street has requested the markets regulator
Sebi to remove the ban on trading in
Indian securities.Sebi said in compliance with its interim order in the
market manipulation case,
Jane Street has credited the amount to an escrow account with a lien marked in favour of the regulator.
"Jane Street has further requested SEBI that, following the creation of this escrow account in compliance with SEBI directions, certain conditional restrictions imposed under the interim order be lifted and that SEBI issue appropriate directions in this regard," Sebi said in a statement.
Read More: BSE, NSE investors foot Rs 1.4 lakh crore bill for Jane Street scandal, F&O mess clean-up
The regulator said it is currently examining the request in accordance with the directions of the interim order.
"SEBI remains committed to following due process and ensuring the integrity of the securities market," it said.Earlier in the month, Sebi had accused Jane Street of running “an intentional, well-planned and sinister scheme” of manipulating the derivatives market in India. The firm was found to have made a profit of about Rs 36,500 crore through systematic "market manipulation".The firm allegedly engaged in aggressive buying of Nifty Bank component stocks and futures during morning hours, artificially inflating prices. They would then reverse these positions later in the day through aggressive selling, causing prices to fall. This coordinated buying and selling was designed to manipulate the index at strategic times to benefit their massive options positions.
SEBI found that Jane Street was "consistently running what appeared to be by far the largest risks in 'cash equivalent' terms in F&O particularly on index option expiry days." The regulator noted that "what sets apart the trading pattern of the JS Group as prima facie being manipulative, is the intensity and sheer scale of their intervention in the underlying component stock and futures markets."
Read More: Jane Street complies with Sebi, deposits Rs 4,843 crore in escrow account
SEBI's investigation uncovered staggering numbers that highlight the scale of Jane Street's operations in Indian markets. During the examination period, Jane Street made total profits of Rs 36,502.12 crore across all segments.
This pattern suggests that Jane Street was using the cash equities, stock futures, and index futures segments primarily to manipulate prices, accepting losses in these segments to generate much larger profits in the options segment.
The scandal has rocked Indian markets, with various capital market infrastructure stocks, including BSE and the unlisted NSE, being impacted. Derivative volumes have also seen a sharp decline of around 20% since the Sebi order.
On the weekly options expiry day of Thursday, the most active trading day, turnover was down over 21% to about Rs 472.5 lakh crore from Rs 601.2 lakh crore a week ago.
