Veteran investor Shankar Sharma has raised sharp concerns about the function of Indian stock market in the recent Jane Street controversy, recommending that earnings intentions may have avoided timely action against the international trading firm.In a post on X (formerly Twitter), Sharma questioned why the exchanges did not act earlier against Jane Street, despite the fact that they are amongst the first to receive trading alerts.How come the stock exchanges never ever sanctioned Jane Street? They are the extremely first to get such signals, Sharma composed.
How can they sanction JS when it drives F&O volume enormously, hence SE profits?Exchanges are not meant to chase profitsSharma, who has actually typically criticised the structure of listed exchanges, restored his require a rethink of their function.
According to him, exchanges function as quasi-regulators and need to run like utilities not profit-driven corporations.I have long held that exchanges must NEVER get noted.
They are a regulator.
Earnings motive creates limitless conflict of interest, he composed.
SEs should be an utility, not for-profits.
Simple as that.
Nahi to, suffer all this hanky-panky.
Live EventsSebi vs Jane StreetOn Friday, the Securities and Exchange Board of India (Sebi) passed an interim order implicating Jane Street, a U.S.-based exclusive trading company, of using high-frequency trading techniques to control index levels such as the Nifty 50 and Bank Nifty.Sebi alleged that Jane Street pushed up index worths in the morning by purchasing stocks and futures, only to reverse those trades later in the day, thereby affecting expiry-day prices of choices in its favour.
The regulator said this permitted the company to create earnings of over Rs 43,000 crore in index alternatives, while deliberately incurring losses in the futures and equities segments.Sebi has actually frozen Rs 4,843 crore in what it referred to as illegal gains and barred Jane Street and its entities from accessing the Indian securities market until additional notice.Stock exchanges under scrutinIn its order, Sebi pointed out that stock market had released caution letters to Jane Street in the past.
It remains uncertain what even more actions, if any, the exchanges took in the past Sebi stepped in with enforcement action.Sharmas remarks have drawn attention to this concern, particularly considering that one of the two significant exchangesBSEis a listed entity, while National Stock Exchange (NSE) remains unlisted however operates as a for-profit organisation.The matter has actually sparked a broader dispute about the role of exchanges in keeping market stability, especially when advanced trading methods and high-volume gamers are involved.(Disclaimer: Recommendations, ideas, views, and opinions given by the professionals are their own.
These do not represent the views of TheIndianSubcontinent)