BSE, CDSL, other capital market shares fall after SEBI bars Jane Street from accessing markets

Shares of BSE fell as much as 7.34% to hit an intraday low of ₹2,613. Motilal Oswal Financial Services shares declined as much as 2.61%, Angel One dropped as much as 7.32%, Central Depository Services Limited (CDSL) declined as much as 2.26% and Edelweiss Financial Services fell as much as 0.91%.

Ban on Jane Street will have an impact on trading volumes which is leading to selling pressure in these shares, analysts said.

Jane Street Group and its associated entities have been barred by SEBI from accessing the securities markets, as per the SEBI's July 3 interim order in the alleged matter of index manipulation by the group.

SEBI said that the entities are prohibited from buying or selling securities, directly or indirectly.

The "unlawful gains" of ₹4,843 crore from the alleged violations have also been impounded, SEBI said. "Banks, where entities are holding bank accounts, are directed to ensure that no debits are made, without permission of SEBI, in respect of the bank accounts held individually or jointly by entities, except for the purpose of complying with this order. However, credits, if any, into the accounts may be allowed," the interim order said.

Furthermore, SEBI said that if Jane Street Group have any open positions in any exchange-traded derivative contracts, they can close out/square off such open positions within three months or at the expiry of such contracts, whichever is earlier.

How Jane Street manipulated Bank Nifty on expiry days

SEBI’s investigation reveals that on 14 separate expiry days, Jane Street entities followed a consistent strategy. In the morning, they would aggressively buy Bank Nifty futures and stocks in the cash segment, while simultaneously selling large volumes of Bank Nifty options.

Post-noon, the strategy reversed—Jane Street would aggressively sell Bank Nifty futures, which SEBI alleges was aimed at dragging the index lower ahead of the day’s close.

The aim, SEBI suggests, was to engineer a softer index close, allowing the firm to book gains on their short positions in options.

On January 17, Jane Street bought Bank Nifty futures worth ₹4,370 crore in the morning and simultaneously sold options worth ₹32,115 crore. In the second half of the trading day, they reversed their futures position, selling ₹5,372 crore worth of Bank Nifty futures.

This activity resulted in a peak short options position worth ₹46,620 crore.

The index closed lower, and Jane Street made a ₹735 crore profit in the options segment.

Despite a loss of ₹61.6 crore in futures and cash positions, the firm ended the day with a net gain of ₹673.4 crore.