In a landmark crackdown, the Securities and Exchange Board of India (SEBI) has banned U.S.-based proprietary trading giant Jane Street Capital and its affiliates from the Indian securities market for allegedly manipulating the Nifty index on expiry days. The market regulator has also impounded $566.3 million (₹4,843 crore) in alleged illegal gains.

SEBI's detailed 105-page interim order outlines how Jane Street, through four of its entities, engaged in aggressive trades in Bank Nifty underlying stocks and futures to influence index prices, allowing them to profit from massive positions in index options. On expiry days, they executed trades worth tens of thousands of crores to shift the index in their favor.

Between January 2023 and May 2025, the group reportedly earned ₹36,671 crore in net profits, with ₹44,358 crore in gains from options trading alone. The manipulation continued even after SEBI issued an advisory in February 2025, prompting regulatory action.

SEBI has frozen Jane Street’s Indian accounts and barred JS Investment India, JSI2, Jane Street Singapore, and Jane Street Asia Trading. Shares of Nuvama Wealth, Jane Street’s local partner, fell 6% after the announcement.

The order underscores SEBI’s commitment to curbing manipulative practices in India’s booming derivatives markets.

The Securities and Exchange Board of India (SEBI) has taken one of its most aggressive enforcement actions to date by banning Jane Street Capital, a U.S.-based quantitative trading firm, from operating in Indian markets. SEBI accused Jane Street and its associated entities of manipulating the Bank Nifty index on options expiry days between January 2023 and May 2025, extracting unjust gains totaling ₹4,843 crore ($566.3 million).

According to SEBI's interim order, Jane Street executed large-scale trades in cash and futures markets to influence the index and profit from positions in the more liquid and volatile index options market. On January 17, 2024, for example, Jane Street allegedly bought ₹4,370 crore worth of underlying assets and sold ₹32,115 crore worth of index options. Later that day, they sold ₹5,372 crore of assets, netting a ₹735 crore gain in options while incurring only ₹61.6 crore in losses in cash/futures.

SEBI highlighted that these tactics, repeated systematically, distorted market integrity and misled retail investors. The four debarred entities are JS Investment India, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading. The watchdog also ordered Indian banks to block any withdrawals from these entities' accounts.

This enforcement comes amid broader concerns about the exponential growth of index options trading in India, where manipulation of benchmarks could disproportionately harm retail traders. SEBI is likely to follow up with policy-level reforms to prevent algorithmic and expiry-day manipulations in the future.