Securities and Exchange Board of India (SEBI) Chairperson Tuhin Kanta Pandey has defended the regulator’s recent action against Wall Street trading firm Jane Street, stressing that the move was necessary to protect the integrity of India’s fast-growing markets.
In an interview with the Financial Times, Pandey rejected Jane Street’s claim that SEBI had wrongly characterised its index arbitrage trades as manipulation, calling it a “sinister scheme” that artificially created arbitrage opportunities.
“Manipulation is where you are artificially creating arbitrage,” Pandey said, adding, “I know these guys are brilliant mathematicians and PhDs, but we can have PhDs from our side. We are not constrained.”
Earlier in July, SEBI temporarily banned Jane Street from trading after accusing it of market manipulation and impounded $567 million of what it described as “illegal gains” from trades.
The firm has since deposited the amount in an escrow account, allowing SEBI to lift the ban while its wider investigation continues. SEBI’s order revealed that Jane Street had made $4.23 billion in profits from trading in India between January 2023 and May 2025.
Pandey dismissed suggestions that Jane Street’s case was indicative of widespread manipulation by other high-frequency or algorithmic traders. Meanwhile, Jane Street has maintained it will challenge SEBI’s order, calling it “extremely inflammatory,” and said it is “engaging constructively” with the regulator.
Pandey also addressed rising concerns over India’s booming derivatives market, fuelled by cheap trading apps and social media influencers attracting millions of young investors. SEBI data shows the number of individual traders in derivatives more than doubled to 9.6 million over three years, while their annual losses jumped from $4.7 billion to $12.2 billion.
While emphasising that SEBI had no intention of “killing” the derivatives market, Pandey said the regulator was working to “sensitise” retail investors about its risks. “We’ve always said this derivative market is important for us. You develop the market, you don’t kill it,” he said.
SEBI expects India’s retail investor base to surge from 130 million today to 400 million by the decade’s end, underscoring the regulator’s balancing act between fostering growth and curbing excessive risk-taking.