New Delhi | July 4, 2025:
In a bold regulatory move, India has officially banned US-based quantitative trading giant Jane Street from operating in its financial markets. The decision follows serious allegations of algorithmic manipulation, unethical high-frequency trading (HFT) practices, and violations of SEBI’s fair market conduct regulations.
Jane Street, valued at over $2.3 billion, is globally known for its cutting-edge quantitative strategies and high-speed trading systems. However, according to Indian regulatory bodies, the firm’s automated trading algorithms were found to be distorting stock prices, exploiting market volatility, and unfairly impacting retail investors in India’s National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
What Did Jane Street Do?
According to an internal report by SEBI, Jane Street allegedly:
- Used latency arbitrage to profit from price differences within milliseconds.
- Executed quote stuffing to mislead other market participants.
- Engaged in cross-border trading flows without proper disclosures.
These activities reportedly skewed market depth, artificially inflated stock prices, and triggered stop-loss hunting, causing losses to thousands of Indian investors, particularly during volatile trading hours.
Government and SEBI’s Response
In a statement, a SEBI official said:
“India welcomes foreign institutional investors, but not at the cost of market integrity. Jane Street’s operations violated multiple provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.”
The Ministry of Finance has also directed a deeper probe into other foreign algorithmic trading firms operating in India without transparency.
Impact on Investors and Markets
The ban could cause a short-term liquidity disruption in Indian markets, given Jane Street’s significant trading volume. However, experts believe this will pave the way for stronger surveillance, fairer market behavior, and better protection for retail investors.
Indian stock exchanges have assured investors that surveillance systems are being upgraded to detect such anomalies in real time.
Expert Opinions
Financial analyst Rakesh Sharma stated:
“This is a landmark case. It’s time India asserts control over its digital trading infrastructure and keeps market access in check for unregulated foreign players.”
What Happens Next?
- Jane Street is barred from all Indian exchanges until further notice.
- Investigations continue under FEMA, IT Act, and SEBI norms.
- Indian investors and brokers linked with the platform may face scrutiny.
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