Shares of Nuvama Wealth Management slumped 7% on Friday to Rs 7,618.35 on the BSE after Indias market regulator barred U.S.-based trading firm Jane Street Group from accessing the countrys securities market, citing alleged manipulation of benchmark indices to reap massive derivatives profits.Nuvama, Jane Streets domestic trading partner, found itself caught in the regulatory crossfire, triggering investor anxiety despite no direct accusations against the firm.The Securities and Exchange Board of India (SEBI), in a sharply worded 105-page interim order, accused Jane Street and its affiliates of using complex high-frequency trading strategies to distort the Nifty 50 and Bank Nifty indicestactics that misled retail options traders and gave the firm an edge in Indias booming derivatives market.SEBI cracks down on manipulative strategiesThe entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, SEBI stated in the order.Live EventsThe regulator said it would impound Rs 4,840 crore in allegedly unlawful gains and directed banks to freeze all debit transactions from Jane Street-linked accounts, including those of JSI Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.According to SEBI, Jane Street earned Rs 36,500 crore in net profits from the Indian market between January 2023 and March 2025, with Rs 43,289 crore coming from index options trades alone, based on National Stock Exchange (NSE) data.The Nuvama linkWhile SEBIs order did not name Nuvama Wealth Management in the alleged misconduct, the firms connection to Jane Street as its on-ground trading partner in India was enough to spook investors.
Nuvama had responded to the NSEs earlier investigation into Jane Streets trades, which the exchange closed in May.
However, SEBI chose to proceed independently with a more forceful stance.The ripple effect extended across the broader capital market stocks.
The Nifty Capital Markets index fell 2% on Friday, with Angel One sliding 7% to Rs 2,740, BSE dropping 6%, and CDSL down over 2%.Inside the alleged tradesOne key strategy cited in SEBIs findings was Intra-day Index Manipulation.
On January 17, 2024, Jane Street allegedly bought Rs 4,370 crore worth of Bank Nifty stocks in the morning session to inflate the index artificially, before reversing the trades later while holding larger bearish options positions.
The result: Rs 734.93 crore in profit in a single day.SEBI found that Jane Street used this manipulation strategy on 15 out of 18 trading days it scrutinised, while deploying an Extended Marking the Close strategy on the other three.The regulator also noted that Jane Street had continued its trading activity in disregard of the caution letter from the Exchange and JS Groups own commitments, even after NSE warned the firm in February 2025.Retail losses, institutional gainsThe order underlined a growing concern in Indias derivatives market: the imbalance between institutional algorithmic trading and retail investor outcomes.
SEBI pointed out that while proprietary and foreign firms earned more than Rs 61,000 crore in FY24 using such strategies, retail investors, who dominate options volumes, faced corresponding losses.Jane Streets role in this lopsided equation has been under scrutiny even outside India.
A U.S.
court battle with rival Millennium Management revealed the firm had earned $1 billion from Indian options in 2023.
Bloomberg later reported Jane Street made $2.3 billion from Indian equity derivatives in 2024.For now, the SEBI ban on Jane Street signals a sharper regulatory lens on the practices of global trading giants, and a cautionary tale for the Indian firms linked to them.
| Sebi bars US trading firm Jane Street from Indian markets, orders Rs 4,840 crore freeze over alleged Nifty manipulation(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.
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