SEBI vs Jane Street: A Dramatic Turn
SEBI has cracked down on Jane Street. The global market maker has deposited Rs 4,843.5 crore into an escrow account.
What Happened?
- SEBI accused Jane Street of “intra-day index manipulation”.
- The firm allegedly executed large trades in options and underlying index stocks.
- SEBI believed this harmed market integrity.
Jane Street’s Response
- The firm rejects SEBI’s claims.
- Jane Street says its trades were legitimate index arbitrage.
- The firm is challenging the order.
Current Status
- Jane Street has deposited Rs 4,843.5 crore into an escrow account.
- The firm has no immediate plans to resume trading.
- SEBI is reviewing Jane Street’s request to revoke certain restrictions.
Impact on the Market
- F&O turnover dropped 17-20% after SEBI’s interim order.
- Liquidity in Bank Nifty contracts thinned.
- Market-making efficiency declined on expiry days.
What’s Next?
- SEBI’s investigation is ongoing.
- A final show cause notice is expected in 6-9 months.
- Jane Street will challenge the order before the Securities Appellate Tribunal (SAT).
