Are there other Jane Street-like funds, traders on radar? SEBI chief replies

Capital markets regulator does not see “many other risks” of market manipulation similar to that uncovered at hedge fund Jane Street, its chairman Tuhin Kanta Pandey said on Monday.

The Securities and Exchange Board of India (SEBI) last week barred four Jane Street entities from accessing its securities markets after a sweeping investigation found the firm made unlawful gains exceeding ₹4,800 crore through manipulative trading strategies.

“And I don’t think there are very many other risks,” Pandey told reporters when asked if SEBI was investigating similar manipulation by other funds or investors.

Pandey said the Jane Street matter was “basically” a surveillance issue, and SEBI is mulling upgrading its surveillance systems.

SEBI’s 96-page order detailed how between January 2023 and March 2025, Jane Street group entities made over ₹43,289 crore in profits trading index options, including deploying what SEBI described as an “Intra-day Index Manipulation Strategy” on at least 15 BANKNIFTY options expiry days.

According to the regulator, the strategy involved aggressive buying of BANKNIFTY constituent stocks and futures early in the day, pushing up the index, followed by aggressive selling later in the session to reverse the trades.

While the group incurred intraday losses of nearly ₹200 crore in these trades, it reaped outsized gains in index options positions.

SEBI concluded that Jane Street’s actions lacked a genuine economic rationale and were designed to artificially move index levels to benefit its positions, misleading other market participants.

Pandey suggested that it is not regulatory powers but better surveillance and enforcement that can help act against any wrongdoers.

Founded in 2000, Jane Street is among the world’s largest quantitative trading firms with over 3,000 employees globally. The firm describes its trading approach as deploying sophisticated quantitative analysis to maintain consistent and reliable prices.

SEBI’s interim order has imposed an immediate ban on Jane Street’s entities from buying, selling, or dealing in securities in India, and ordered the disgorgement of “unlawful gains.”

The regulator warned that such manipulative strategies could harm numerous small investors unaware of such behind-the-scenes trading tactics.

With suggestions coming in on how having monthly expiries in the derivatives segment can help protect retail investors, Pandey said there is no such move under consideration.

He said whatever further steps the regulator takes to protect retail investors in the derivatives market will only be based on data.