Sebi action on Jane Street
The controversy between the US -based New York -based major trading firm Jane Street Group and India’s market regulator SEBI have started hearing in the appellate court of three judges today. Both Indian and international markets are watching this matter very deeply, as its results can have a big impact on India’s derivative market.
The bench headed by Justice PS Dinesh Kumar in front of the Securities Appellate Tribunal (SAT) will consider whether SEBI’s interim order issued in July was correct or not. In this order, Jane Street was made serious allegations of rigging, against which the company has filed an appeal last week. At the same time, the company has demanded that the action of SEBII should be stopped till the hearing is completed.
What is Jane Street?
Jane Street says that SEBI has refused to share the important documents required in its investigation with the company, which is weakening their defense. Especially Jane Street has demanded Dubai’s hedge fund manager Mayank Bansal from SEBI for email conversation and documents of fairs with NSE. It is believed that Mayank Bansal gave SEBI information related to trading of Jane Street in India.
At the same time, it can be said by SEBI that these internal communication is part of the separate investigation process and they have no relation with the order of July. At the same time, SEBI can also argue that no rigging was found in the NSE report, but this investigation was different from this case.
What could be decided?
According to experts, the roadmap of hearing will be decided in the first hearing. The court can decide when and how SEBI will have to answer. If the court feels that Jane Street is not shut down by not sharing SEBI documents, then the company may demand SEBI to stop the investigation.
According to Abhiraj Arora, partner of Mumbai’s law firm Saraf and Partners, the main focus of both sides is on interim restriction i.e. interim relief. The tribunal can give Gen Street temporary relief in this case, so SEBI can not be asked to take any action in the meantime.
This case is important for India’s derivative market
This case is not only limited to Jane Street, but it can also affect other high-speed trading firms of the market such as jump trading, Citadale Securities and IMC trading. India’s derivative market is becoming increasingly a center of attraction for global trading firms.
According to SEBI report, in FY 2025, retail investors lost about $ 1200 crores in futures and options trading, which mainly benefited these high-frequency trading firms. In such a situation, the decision of this matter can prove to be a guideline for market transparency, fairness and regulatory stiffness in India.