After nearly two weeks of regulatory limbo, Jane Street has moved quickly to contain the fallout from Sebi’s explosive allegations of market manipulation. The US-based quant trading firm has deposited Rs 4,843.5 crore into a designated escrow account, fulfilling the market regulator’s primary condition for lifting the trading ban imposed on July 3.
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The deposit was made with a scheduled commercial bank in India, with the lien marked in Sebi’s favour. This move signals Jane Street’s intent to comply and stay invested in India’s fast-growing financial markets, despite the ongoing probe.
No greenlight for aggressive strategies yet
While the interim restriction on trading has been lifted, the firm is still under the scanner. Sebi has barred Jane Street from deploying the specific options trading strategy that led to the initial crackdown. The regulator has also instructed Indian Stock Exchanges to supervise the trades conducted by the firm to identify and flag any patterns of suspicion or market manipulation.
The overarching message from this mostly says that compliance will not absolve them of their wrongdoing. If Jane Street is to continue trading in the Indian markets, it will do so only if it can demonstrate it adheres to the best standards of fair trading.
What happens next?
It is uncertain whether Jane Street will re-start operations immediately. The firm may choose a measured approach and ultimately wait before taking new positions until the regulatory text has breathed. Meanwhile, if Jane Street can formulate its legal arguments against Sebi’s preliminary conclusions, it is plausible for the regulator to release the funds being held in escrow and relinquish any imposed restrictions.
The broader message from this largely says that compliance alone won’t guarantee a clean slate. Continued access to the Indian markets will depend on Jane Street’s adherence to the highest standards of fair trading.
A scandal that rocked the exchanges
Sebi’s July 3 order sent shockwaves through Dalal Street, accusing Jane Street of executing a “sinister and manipulative scheme” in Nifty Bank options trading. In the weeks that followed, derivatives turnover nosedived, BSE and NSE shares tanked, and Rs 1.4 lakh crore in investor wealth was wiped out.
Between January 2023 and March 2025, Jane Street is estimated to have traded Rs 44,358 crore worth of equity derivatives in India, highlighting just how deep its footprint runs in the domestic market.
What can the investors expect?
For market participants, Jane Street’s compliance is just the first step. The bigger story lies in how Sebi sets the tone for future high-frequency and quant trading in India, balancing global capital flows with the need for robust, tamper-proof market infrastructure.
