Sebi Cracks Down on Jane Street

"Until the completion of the investigation and the related proceedings, it is imperative that exchanges should monitor any future dealings and positions of JS Group closely on an ongoing basis, to ensure that they do not, either directly or indirectly, indulge in any kind of manipulative activity.

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This is crucial to preserve the overall faith in the ecosystem and to protect investors," Sebi whole-time member Ananth Narayan wrote in the order.

The markets regulator also added that JS Group's conduct distorted prices, misleading thousands of small investors, and causing unfair losses or missed opportunities.

"Jane Street disputes the findings of the Sebi interim order and will further engage with the regulator. Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world," said the firm's spokesperson.

Sebi sources said the investigation will continue as only 21 days—18 involving Bank Nifty and three involving Nifty 50—have been covered now. Investigations into other expiry days, indices (including across exchanges) and potential patterns besides the two highlighted in the order will need to continue. They added that it would be difficult to estimate how long all this would take. "Every user of an algo is responsible for the output of the algo," one of the sources said.