India’s regulator has banned US firm Jane Street from operating in its markets after finding it guilty of price manipulation. The move has raised concerns over investor protection and the role of regulators in detecting such trades.
The Securities and Exchange Board of India (SEBI) has accused Jane Street of accumulating large long positions in stocks that are part of the National Stock Exchange’s Bank Index and building large short positions in index options at the start of trade. The regulator also found evidence of trades made by offshore entities, making it difficult to pinpoint the location of the manipulative activity.
Jane Street has disputed SEBI’s findings, claiming that its trading activities were legitimate index arbitrage. However, experts say that proving manipulation involves showing intent, which can be hard to demonstrate.
The ban has sent shockwaves through India’s options market, with trading in equity index options slumping by a third since the announcement. Retail investors, who form nearly half of the Indian options market, are particularly vulnerable to price manipulation.
Regulators and experts say that while SEBI’s recent measures aim to protect retail investors, more needs to be done to stem irregular trades early and prevent such manipulative activities.
The case has raised questions about the effectiveness of regulators in detecting price manipulation and protecting investor interests. As India continues to grow as a major player in global options trading, the importance of robust regulation will only increase.
Source: https://www.aljazeera.com/economy/2025/7/18/indias-ban-on-jane-street-raises-concerns-over-regulator-role