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Zerodha's Nithin Kamath, internet react to Jane Street ban in India: ‘You've got to hand it to SEBI’
SEBI has barred Jane Street from India's securities market over alleged index manipulation, seizing ₹48.4 billion in unlawful gains.
A storm has hit India’s trading floors as the Securities and Exchange Board of India (SEBI) cracks down on US-based Jane Street for alleged manipulation.
The interim order, which includes the seizure of ₹48.4 billion (~$567 million) in alleged unlawful gains, has drawn sharp, and in some cases scathing, reactions from traders, CEOs, and market analysts.
Reactions pour in
Nithin Kamath, Zerodha co-founder, commended SEBI’s bold move and drew attention to the broader implications, “You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation. The shocking part? They kept at it even after receiving warnings from the exchanges.”
(Also Read: How did US trader Jane Street allegedly cheat Indian markets to make ₹36,500 crore)
He suggested that Jane Street’s behavior might stem from being “used to the lenient US regulatory regime,” highlighting practices like dark pools and payment for order flow, which would not be allowed in India.
However, Kamath also cautioned about the fallout, “Prop trading firms like Jane Street account for nearly 50% of options trading volumes. If they pull back, which seems likely, retail activity (~35%) could take a hit too. So this could be bad news for both exchanges and brokers.”
He added that the coming days will reveal how dependent Indian F&O markets are on these global prop giants.
Deepak Shenoy, CEO of Capitalmind AMC, drew a striking comparison, “Turns out Jane Street did a massive version of GameStop on India.”
Meanwhile, trader Piyush Chaudhry dismissed the firm’s strategy as brute-force manipulation,“SEBI’s order makes it clear: There was no genius at play in Jane Street’s strategy, just sheer Money Muscle. No cutting-edge quant work or elegant arbitrage, but exploiting liquidity to rig Expiry in their favour. No sophistication, no finesse, just capital overpowering structure.”
Ravindra, an entrepreneur wrote, "The game must always remain fair. But Jane Street crossed the line, cheating under the guise of technology.
What SEBI found?
According to SEBI’s July 3 interim order, Jane Street and its related entities used aggressive derivatives strategies to manipulate the Bank Nifty index on monthly expiry days. The trades, SEBI claims, harmed retail investors and tilted the expiry outcomes in Jane Street’s favor.
This marks SEBI’s most severe action against a foreign firm, both in terms of restrictions and monetary penalties. The impounded funds— ₹48.4 billion—were described as “unlawful gains” from the alleged manipulation.
What is Jane Street?
Founded in 2000, Jane Street is one of the world’s most influential proprietary trading firms. With over 3,000 employees and offices across the US, Europe, and Asia, it reported $20.5 billion in annual revenue last year, Reuters news agency reported.
The firm describes itself as a “puzzle-solving” collective that uses advanced quantitative models to stabilize global markets.
But India’s market regulator has challenged that narrative, at least in its local operations.
“Some of the firm’s strategies were manipulative and led to losses for retail investors,” SEBI stated.
(Also Read: Who is Jane Street, the US trading firm facing heat in India?)
(With Reuters inputs)
