Jane Street will be allowed to resume trading on the National Stock Exchange and BSE from Tuesday, nearly three weeks after the US hedge fund was barred from operating in India due to alleged market manipulation.
The development follows an update from the Securities and Exchange Board of India late Monday clarifying that Jane Street could resume trading in the country’s stock exchanges subject to stipulations laid out in its 3 July interim order, said two people aware of the matter.
Jane Street entities will also be allowed to trade on the highly popular index options segment on both the exchanges provided they abide by Sebi’s conditions.
“Jane Street will be allowed to trade on NSE effective Tuesday, per Sebi’s directions in its interim order, which precludes them (Jane Street entities) from engaging in any manipulative trades alluded to in the order,” said one of the persons mentioned above.
Sebi in its interim order barred four Jane Street entities for alleged manipulation of indices such as Bank Nifty and Nifty to make ₹43,289 crore on index options between January 2023 and March 2025.
Sebi also directed the four Jane Street entities to “cease and desist from directly or indirectly engaging in any fraudulent, manipulative, or unfair trade practice that may be in breach of its regulations”.
In a statement issued “Jane Street entities have confirmed that they will comply with this,” the regulator said in a press release issued on Tuesday.
On 11 July, Jane Street ₹4,843.5 crore in an escrow account”>deposited ₹4,843.5 crore in an escrow account to be able to resume trading in India, as directed by Sebi, although it has hired law firm Khaitan & Co. to contest the regulator’s interim order.
Jane Street has said that its trades were in the nature of arbitrage, exploiting price differences in the same underlying index across futures and options on Nifty and Bank Nifty.
“Not all the four entities were active on BSE, but those that were will be enabled to trade on the exchange from tomorrow (Tuesday) under the heightened monitoring surveillance stipulated by Sebi’s interim order,” said the person quoted above.
NSE, BSE and Sebi didn’t immediately reply to Mint’s queries.
Shares of the listed BSE Ltd jumped almost 3% to ₹2,521.3 apiece on Monday before the Sebi update. NSE’s unlisted shares rose 2.5-5% to ₹2,150-2,200, per Narinder Wadhwa, managing director at SKI Capital, who said demand for the shares had spurted.
Mint had reported on 16 July that although Jane Street had met a key requirement to resume operations in Indian markets by depositing over ₹4,843 crore, its immediate return to trading wasn’t certain amid multiple regulatory hurdles and unprecedented scrutiny.
Legal experts cited in the report had said the deposit only served as a safeguard so the alleged illegal gains don’t leave the Indian jurisdiction or get dissipated while the investigation continues.
In a statement on 21 July, Sebi clarified that its interim order barring Jane Street from trading in the securities market shall cease to apply as the quant trading firm had deposited the alleged illegal gains in an escrow account.
Sebi has also directed the stock exchanges to closely monitor any future dealings and positions of Jane Street Group to ensure it does not directly or indirectly indulge in any kind of manipulative activity.
Sebi’s probe into Jane Street trading is continuing with a final order expected to take months, per one of the people mentioned above.
