SEBI ramped up Jane Street probe resulting from insufficient knowledge, continued complaints, say sources

The Securities and Exchange Board of India (SEBI) launched a proper investigation into Jane Street’s buying and selling practices though its surveillance division had beneficial in any other case resulting from continued complaints from market contributors, two sources with direct data of the matter mentioned.

SEBI additionally believed insufficient knowledge was used within the preliminary probe into the U.S. high-frequency buying and selling agency, the individuals mentioned, amid fears it might need “manipulated” the inventory and bond markets.

The apex regulatory physique on July 4 quickly barred the agency from native markets on allegations of market manipulation, which the corporate has denied.

SEBI imposed a $567 million penalty on Jane Street, which the corporate has deposited. While it could actually restart buying and selling in India, it has shunned doing so, Reuters reported final month.

On Wednesday (September 3, 2025), Jane Street filed an enchantment earlier than the Securities Appellate Tribunal (SAT) towards SEBI in search of paperwork and knowledge which led to the formal inquiry.

The agency questioned why the regulator went towards the recommendation of its personal surveillance division that the inquiry towards Jane Street needs to be closed and sought paperwork that supported the regulator’s change of stance.

The enchantment, initially scheduled for Monday (September 8, 2025), will now be heard by the Tribunal on Tuesday (September 9, 2025) after a authorities change to the date of the Eid vacation.

Emails despatched to SEBI and Jane Street in search of feedback weren’t answered. The agency had earlier declined to touch upon its enchantment.

According to the 2 sources, SEBI’s prime management was not glad with the robustness of the primary examination concluded by its personal surveillance division on December 11 and selected to provoke a proper investigation in direction of the tip of December 2024, which supplies it powers to hunt knowledge from the buying and selling agency’s custodian financial institution and home buying and selling companion.

A proper investigation is a quasi-legal course of underneath Indian regulatory guidelines, in distinction to an inside enquiry.

According to Sumit Agrawal, a former SEBI official and founding companion of Regstreet Law Advisor, as soon as a proper investigation is initiated any prior conclusions lose their weight, and the method begins anew.

“Earlier determinations, whether or not beneficial or antagonistic, are put aside in favour of an unbiased investigation,” he mentioned.

The regulator had additionally continued to obtain complaints from market contributors of manipulation of India’s key indexes, the 2 individuals mentioned.

The agency in its enchantment has sought copies of those complaints.

One such grievance was filed by UAE-based choices dealer Mayank Bansal on December 17, who informed Reuters that “communication between a market participant and the regulator is premised on confidentiality”.

The division which oversees India’s market regulation later that month beneficial opening an investigation to convey finality to the matter, the primary supply mentioned.

SEBI tasked a brand new group with reviewing the agency’s buying and selling exercise over a for much longer timeframe than the buying and selling knowledge examined by its surveillance division. The knowledge was additionally rather more detailed, the 2 individuals mentioned.

While the regulator continued the investigation, it issued a warning to the agency by means of Indian exchanges in February that it ought to chorus from taking giant positions on days when derivatives contracts expire, in keeping with the regulator’s 4 July order. Price volatility can usually spike round these expirations.

But the agency’s buying and selling efficiency on May 15 which earned it 3.7 billion rupees ($42.28 million), pressured SEBI’s hand to cross an order, mentioned the primary supply.

“SEBI officers labored in a single day to complete its investigation in June, which in the end led to passing the order,” the primary particular person mentioned.

($1=87.5060 Indian rupees).