SEBI Interim Order – Jane Street Index
Manipulation
Background and Context
• Initial trigger: April 2024 media reports (Jane Street vs Millennium legal dispute) alleged misuse of
proprietary trading strategies in Indian options markets. SEBI began a preliminary review of Jane
Street Group’s trading activity 1 2 .
• Investigation launched: By July 2024, NSE was asked to examine JS Group trades for market abuse
3 . SEBI noted unusually large “cash-equivalent” exposures and volatility on weekly index‐option
expiry days (late 2024) and formed a dedicated team to probe further 4 .
• Regulatory warnings: On Feb 6, 2025, NSE (per SEBI’s instruction) issued a caution to Jane Street
Singapore Pte Ltd and JSI Investments Pvt Ltd, advising them to refrain from abnormally large
positions and suspicious trading patterns 5 .
• Continued activity: Despite these warnings, by mid-May 2025 JS Group was still running very large
index-option positions on expiry days 6 . SEBI therefore proceeded to issue an interim order.
Entities Involved
• Jane Street Group LLC: A global proprietary trading firm (US-based, with 2,600+ employees in
multiple geographies) 1 .
• JS Group Affiliates: Four entities under the Jane Street umbrella (collectively “JS Group” in the order):
• JSI Investments Pvt Ltd (Entity 1, India) – parent of JSI2;
• JSI2 Investments Pvt Ltd (Entity 2, India) – wholly owned by JSI Investments;
• Jane Street Singapore Pte Ltd (Entity 3, Singapore) – fellow subsidiary of JSI Investments;
• Jane Street Asia Trading Ltd (Entity 4, Hong Kong) 1 7 .
• These entities were coordinated as a single group for trading in India 8 . Jane Street’s foreign
portfolio investment (FPI) entities held very large index option exposures in India (their total profits
in FY22–24 were reported at ~₹32,681 crore 9 ).
Alleged Manipulative Strategies
• Intraday Index Manipulation: On identified expiration days (mainly BANKNIFTY), JS Group first
bought large quantities of index-component stocks/futures early in the day, artificially boosting the
index. Shortly thereafter, it reversed those positions (selling heavily), thereby realizing profits on its
existing BankNifty option positions. SEBI found this pattern on 15 BANKNIFTY expiry days 10 11 .
• Extended Marking the Close: On certain expiry days (notably NIFTY options in May 2025), JS Group
placed concentrated buy orders near market close, lifting the closing index level to increase the
value of its expiring option positions 12 13 . This “marking the close” strategy was explicitly
observed on three NIFTY expiry days in May 2025, yielding significant option profits.
• Coordinated Option Positions: These trading patterns were aligned with JS Group’s large options
(delta) exposures. SEBI noted that the end-of-day buying was timed to “maximize profits from their
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much higher positions held in index options” 12 , rather than for normal hedging. The deliberate
alignment of futures/cash trades with option bets was deemed a structured manipulation of the
underlying indices.
Major Findings
• Identified occurrences: SEBI’s analysis documented 21 expiry days with JS Group trades matching
the above strategies (18 in BANKNIFTY, 3 in NIFTY) 14 15 .
• Illegal gains: Using its methodology, SEBI computed JS Group’s net option profits (“unlawful gains”)
on each day (Table 44). These ranged roughly from ₹150–735 crore per day on BANKNIFTY expiries
16 . For example, on 17 January 2024 (BANKNIFTY expiry) JS Group made ~₹734.93 crore 17 . In
total, the 21 identified days produced ~₹4,843.6 crore in gains 18 19 . (This figure was mandated to
be impounded by SEBI.)
• Associated losses: In executing the intraday scheme, JS Group’s cash/futures trades incurred a net
loss of ~₹199.7 crore across those 15 BANKNIFTY days 11 . SEBI observed that these losses were an
“irrational” cost of influencing the index and concluded they were willful expenses to perpetrate the
manipulation 20 . (Notably, SEBI held that these losses should not offset the illegal gains.)
• NIFTY marking profits: The three NIFTY expiry days in May 2025 (extended close marking)
generated ~₹370 crore of profit in index options 13 .
• Market impact: SEBI noted these patterns distorted price formation, inducing other participants to
trade at artificial prices. In particular, SEBI linked JS Group’s massive profits to the losses suffered by
typical traders: its own research found 93% of ~1 crore individual F&O traders lost money from
FY22–FY24 15 . The order implied that JS Group’s actions may have contributed to this outcome.
• Legal violations: SEBI’s prima facie view is that JS Group’s schemes breach Section 12A of the SEBI
Act and PFUTP Regulations (3(a)–(d), 4(1), 4(2)(a) & (e)), as manipulative and unfair practices 21 .
Regulatory Response and Interim Measures
• Prior steps: In Oct 2024 SEBI issued a circular to curb heavy trading in index options on expiry, and
NSE was engaged to scrutinize JS Group’s transactions 22 . The Feb 2025 NSE caution letter (above)
reflected these concerns 5 .
• Interim order (July 2025): SEBI issued an ex parte interim order (pending detailed probe) with
sweeping directions 19 . Key measures include:
• Impounding gains: The calculated unlawful gains (~₹4,843,57,70,168) are to be deposited jointly by
the entities into a SEBI‑liened escrow account 19 .
• Trading ban: All four JS Group entities are barred from directly or indirectly buying, selling or dealing
in any securities 19 .
• Asset/account freeze: Banks must not debit (without SEBI permission) any of the entities’ accounts,
while depositories and custodians must freeze movements of their securities/mutual funds 19 23 .
• Asset inventory: The entities must submit a full inventory of all Indian assets, accounts and
holdings within 15 days 24 . They are prohibited from disposing of any assets in India until the
impounded amount is deposited 24 .
• Positions unwind: JS Group may close out any existing derivatives positions within 3 months or by
contract expiry 25 .
• Monitoring directive: Stock exchanges must closely monitor any future dealings or positions of JS
Group to prevent further manipulative activity 26 .
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• All interim directions remain in force until further orders, and the entities have 21 days to respond or
seek a hearing 27 19 .
Disclosed Profits and Losses
• Total illegal gains: SEBI identified ~₹4,843.6 crore in total index-option profits attributable to the
schemes 18 19 .
• Daily profits: Per-day gains (BankNifty) included amounts like ~₹150.90 crore (6 Dec 2023) and
~₹734.93 crore (17 Jan 2024) 16 .
• Marked-close gains: The three NIFTY expiry days in May 2025 produced ~₹370 crore in combined
profit 13 .
• Cash-market losses: The JS Group absorbed ~₹199.7 crore in losses on the underlying cash/futures
trades (across 15 BankNifty days) as part of the schemes 11 . SEBI treats this as a deliberate cost of
executing the manipulation.
• Investor losses: No specific aggregate loss figures for other market participants are given; however,
SEBI noted that its prior research (Sept 2024) found 93% of F&O retail traders lost money (FY22–
24), implying JS Group’s activities may have contributed to others’ losses 15 .
Sources: SEBI’s interim order (Index Manipulation by Jane Street Group, July 2025) 1 19 18 15 .
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