It was a late-night interim order on Thursday and issued by whole time member Anantha Narayan G.
In it, markets watchdog Securities and Exchange Board (Sebi) debarred US proprietary trading firm Jane Street and three of its related entities—JSI2 Investments, Jane Street Singapore, Jane Street Asia Trading—from accessing the markets. Additionally came the order to impound Rs 4,843.5 crore of illegal gains from the Rs 36,500 crore of total profits Jane Street has scooped up from manipulating the Bank Nifty index on the expiry days between January 2023 and March 2025.
The 105-page order and the case underlined how big players with high technology can game the system.
The Sebi has found the manipulative trading patterns of JS Group early this year. Also, the NSE as a first-line regulator clearly and explicitly cautioned the JS Group to desist from taking on large risks in the index options markets, and to desist from undertaking trading patterns that raised concerns of manipulative behaviour.
In turn, the JS Group itself represented in February 2025 to the NSE of their commitment to adhere to all regulations, the regulator said in its order.
According to the Sebi findings, Jane Street used to heavily buy Bank Nifty futures as well in the cash segment and sell Bank Nifty options in big numbers—all in the morning of the expiry days. By the afternoon of the same day, its related entities used to aggressively sell large quantities of Bank Nifty futures and pocket hefty profit.
Sebi's calculation is that JS and three of its associated entities made a whopping Rs 36,671 crore in profits between January 2023 and May 2025. Of the total gain, Sebi considers as much as $566.3 million or Rs 4,843.5 crore—illegal gains.
'Egregious behaviour"
The group’s total illegal profits identified across 15 days in May 2025 was Rs 4,843 crore. Between January 2023 and March 2025, JS made Rs 44,358 crore in options, lost just Rs 7,208 crore in stock futures, lost Rs 191 crore in index futures and Rs 288 crore in cash. Overall its net profit stood at Rs 36,671 crore.
What JS Group used to do was on the expiry days, it aggressively bought large amounts in Bank Nifty underlying stocks/futures (to the tune of Rs 4,370 crore on Jan 17, 2024 and sold this index options Rs 32,115 crore. By afternoon, it aggressively sold large underlying stocks/futures worth Rs 5,372 crore. Peak short position in the index options segment was Rs 46,620 crores. Thus it made a clean profit of Rs 735 crore from index options, while its intraday loss from cash/futures was only Rs 61.6 crore.
Narayan stated the US trading firm’s “four entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly.”
Sebi also noted that JS Group again resorted to undertaking prima facie manipulative “extended marking the close” trading patterns of large and aggressive intervention in index and constituent markets towards the expiry day closing, so as to influence and manipulate the index to their illegal advantage in May 2025, despite a caution letter in February and its own declarations to the NSE.
"Such egregious behaviour, in clear disregard/defiance of the explicit advisory issued to them by the NSE in February 2025, amply demonstrates that unlike the vast majority of foreign portfolio investors and other market participants, JS Group is not a good faith actor that can be, or deserves to be, trusted.
"In the face of such a strong prima facie case that allowing the JS Group to continue as before may severely compromise investor protection on an extraordinary scale, Sebi has a duty to directly intervene," Narayan said in the order.
What was JS’ manipulative strategy?
According to a Sebi order dated July 3, on 14 expiry days, Jane Street used to heavily buy Bank Nifty futures in bulk as well in the cash segment and sell Bank Nifty options in big numbers--all in the morning. After noon, the Jane Street entities used to aggressively sell large amounts in Bank Nifty futures and influence the closing of the index on expiry days.
Instances of manipulation
For example, in the morning of January 17, 2024, Jane Street aggressively bought Bank Nifty futures worth Rs 4,370 crore and sold Bank Nifty options for Rs 32,115 crore. By afternoon, it aggressively sold large amounts in Bank Nifty in the underlying futures for Rs 5,372 crore.
This created a peak short position of Rs 46,620 crore in the Bank Nifty index options segment. This led to a softer closing of Bank Nifty and JS made a profit of Rs 735 crore in the options segment, and made an intraday loss of Rs 61.6 crore in cash and futures. Thus, it made a clear-cut gain of Rs 673.4 crore on that expiry day.
Sebi has also found another JS strategy, under which huge short positions were created in Bank Nifty futures and its constituents in the cash segment in the last two trading hours to manipulate the index expiry closing.
On July 10, 2024, JS aggressively sold Bank Nifty futures for Rs 2,800 crore and created a short position in the options for Rs 44,154 crore. Hence, the closing was softened and a profit of Rs 225 crore was made.
Repeated patterns
Sebi probe has found a repeated pattern in the trades and alleged that these were not normal trades but were market manipulation in violation of its prohibition of fraudulent and unfair trade practice (PFUTP) regulations.
Despite the news of Sebi's likely investigation against Jane Street, the entities continued to play the market. According to the Sebi order, on May 15, 2025, and two other days in May 2025, in the last two hours of Nifty expiry, JS aggressively bought Nifty futures and underlying stocks for Rs 4,911 crore to influence the closing.
Meanwhile, following the Sebi ban, JS disputed the Sebi findings but said it is committed to operating in compliance and that it will further engage with the regulator.
Jane Street told Reuters that it disputes the Sebi findings but is willing to further engage with the regulator as it “is committed to operating in compliance with all regulations in the regions we operate around the world."
JSI Investments, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading have been prohibited from the markets and the ban will be in force till the final order is passed.