Zerodha co-founder and CEO Nithin Kamath has commended the Securities and Exchange Board of India (SEBI) for its decisive action against US-based trading major Jane Street. Reacting to the regulator’s interim order that accuses Jane Street of manipulating the Bank Nifty index, Kamath praised India’s market watchdog for maintaining a strong and transparent regulatory environment that does not tolerate practices common in the West.

In a post on X (formerly Twitter) on Friday, Kamath stated, “None of these practices would be allowed in India, thanks to our regulators.” He was referring to controversial mechanisms such as dark pools and payment for order flow — strategies frequently criticised for benefiting institutional traders and hedge funds while disadvantaging retail investors.

Kamath’s remarks came after SEBI accused Jane Street and its group entities of deploying complex intra-day strategies to manipulate the Bank Nifty index. According to the order, the firm made staggering profits of over Rs 43,289 crore between January 2023 and March 2025, primarily through options trading. SEBI alleges the company artificially boosted and suppressed the index — particularly on expiry days — to maximise gains.

“You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation,” Kamath said, highlighting the seriousness of the charges.

He also pointed out that Jane Street reportedly continued with its trading activities despite receiving alerts from Indian exchanges — an indication, he suggested, of how some global players are accustomed to lighter regulatory oversight in other countries.

However, Kamath also cautioned that this regulatory clampdown could have broader implications. He noted that proprietary trading firms like Jane Street account for nearly 50% of India’s options trading volumes. A pullback by such firms could negatively impact both brokers and exchanges, especially as retail investors contribute around 35% to the volumes.

“This could be bad news for both exchanges and brokers,” he warned, adding that the coming days would be critical in assessing how much the Indian derivatives market depends on large proprietary trading houses.
“F&O volumes might reveal just how reliant we are on these prop giants,” Kamath concluded.