Jane Street Calls Sebi Charges Inflammatory

US trading firm says it will contest ban; maintains that the practices in question were 'basic index arbitrage trading'

- BENN KOCHUVEEDAN @ Mumbai

STATING that it has only engaged in basic arbitrage, the now-banned US high-frequency trading giant Jane Street said it is preparing an official response to Sebi's charges.

The trading firm argued that arbitrage trades are a core and common mechanism of financial markets and said it will contest the ban imposed by Sebi, which accused it of market manipulation, maintaining that its practices in question were "basic index arbitrage trading."

It has been reported that the company, in an internal note to employees, said it is "beyond disappointed" by what it called "extremely inflammatory" accusations by the Securities and Exchange Board of India (Sebi) and is working on a formal response. The Sebi Act allows a market participant to challenge any adverse action first in the Securities Appellate Tribunal (SAT), and then in the High Court and Supreme Court.