In April 2024, the regulator acted upon some media reports informing on a legal matter of Jane Street Group. The issue pertained to unfair use of prop trading methods in the Indian stock market.
Thereafter, in July, the National Stock Exchange looked into the issue, and upon an interaction with SEBI in August, the group gave its side of the story. While the proceedings were still brewing up, the Indian markets saw one of the biggest derivatives trading norms rejigs in October.
SEBI issued a circular announcing a series of policy steps in order to address what was seen as overtrading in index options on expiry day.
On Nov. 13, 2024, the NSE examination report on JS Group’s trading activity was submitted, and later, as per the order, the exchange observed what appeared to be abnormally high or low volatility on weekly index options expiry days.
Further, SEBI noted that there were certain entities consistently running what appeared to be by far the largest risks in ‘cash equivalent’ terms in F&O, particularly on expiry days, the order read.
The group was found to have continued with these trading activities despite receiving a cautionary letter from NSE.
Jane Street Group sent responses to the caution letter in early and mid-February 2025. But by May 15, 2025, SEBI noted that the group continued to carry out trades in the same manner, disregarding both the exchange’s caution and their own earlier commitments.
SEBI’s order further explains the corporate structure of Jane Street’s operations in India.
The Indian entity, JSI Investments Pvt Ltd, has clear links to Jane Street Group LLC, based in the United States, which is its ultimate holding company. Another company involved, JSI2 Investments Pvt Ltd, is fully owned by JSI Investments Pvt Ltd.
Jane Street Singapore Pte Ltd was also found to be a sister company under the same group, and these connections were confirmed through financial documents and related party disclosures.
In addition, Jane Street Capital LLC, a US-registered broker, and Jane Street Asia Trading Ltd were also shown to be under the same corporate umbrella of Jane Street Group LLC.
The regulator emphasised that all these companies operated under common control and should not be treated as separate or independent entities.
SEBI reached this conclusion after also considering that these companies used the same domain name — janestreet.com — while setting up their trading accounts in India.
In a submission made in August 2024, Jane Street Group responded to SEBI’s preliminary questions on behalf of all the entities involved in Indian trading. Based on this, SEBI concluded that these were not standalone operations but part of one coordinated group.
Therefore, the entire set of trading activities by these entities has been examined together, under the view that they form part of the larger Jane Street Group’s global operations.
