“JANE STREET DIDN'T BREAK THE SYSTEM, IT SHOWED HOW EASY IT IS TO BEAT IT”

In a candid and hard-hitting interview, veteran financial market expert PRABAL BASU ROY unpacks the deeper fault lines exposed by the Jane Street episode, questioning Sebi’s readiness, the legal vacuum around algo trades and how retail investors remain dangerously unprotected

- PRABAL BASU ROY

How do you interpret the alleged “marking the close” strategy used by Jane Street? Is this considered manipulation under global best practices? Your thoughts on Sebi’s action in this case?

This is one of Sebi’s most significant regulatory actions, and it took courage to act. Whether the timing was ideal is debatable, but the intent—to uphold market fairness and protect retail investors—is aligned with global standards.

The issue lies in exploiting specific vulnerabilities in an otherwise regulated market. Tackling abuse via algorithmic trading requires technology-driven safeguards.

Jane Street is a global leader in algo trading, even ahead of Goldman Sachs or Citadel. It’s hard to believe they wouldn’t understand Indian regulations—though we don't yet have the full picture.

Allegedly, they used deep capital to trigger volatility in certain stocks and influence options prices, then profited from the options. This tactic, though common in US expiry events, is riskier in India due to the absence of counterbalancing players.