Sebi Probes Jane Street's Derivative Trades in 3 Years

India's markets regulator is investigating Jane Street's derivatives trades stretching back three years to check if one of the world's largest quant trading firms intended to manipulate the country's benchmark stock indexes, according to two sources with direct knowledge of the matter.

- Reuters

MUMBAI:

The investigation—the largest such into a global trading firm—follows a series of steps taken by the Securities and Exchange Board of India (Sebi) to cool the frenzy in India's derivatives markets.

Sebi is investigating Jane Street, Jane Street Singapore Pte and JSI Investments, the firm's India unit, and studying the firms' algorithmic trading strategies in the National Stock Exchange's index of top 50 stocks and its index of banking stocks, one of the sources said.

"The investigation is to establish whether there was a repeated pattern of taking outsized derivatives positions in index constituents, particularly bank stocks, then trade the index in the physical market to profit from its position," the source said.