INSUBCONTINENT EXCLUSIVE:
over whether the regulator can keep pace with the speed, complexity, and scale of modern derivatives trading
affiliates from accessing Indian markets on July 3 and ordered the impounding of Rs 4,840 crore in alleged unlawful gains
profit from options positions.Goel outlined several regulatory gaps that need plugging
tighter expiry-day limits, more transparency in foreign portfolio investor (FPI) structures, and faster action on unusual profits
workedSebi's interim order details how Jane Street, through a coordinated network of four entities, including two FPIs registered in
Singapore and Hong Kong, allegedly manipulated index levels on 18 expiry days from January 2023 to March 2025
The firm aggressively bought select index stocks in the morning to push the index up, then reversed those trades while holding bearish
options positions that gained as the index fell.In one striking example on January 17, 2024, the firm allegedly made Rs 735 crore in a
40 Nifty, Nifty Bank stocks in expiry-day tradesMarket shakeup and falloutThe ripple effects were immediate
BSE fell 6.4%, while CDSL slipped 2%
Retail participation could take a hit too, warns Zerodha founder Nithin Kamath
Most profits were booked in its Singapore FPI arm, taking advantage of treaty-based tax exemptions, while Indian entities allegedly executed
fallLegal and enforcement questions loomWhile the order is based on prima facie findings, legal experts say enforcement may prove tricky
He pointed out that Sebi's order allows trading restrictions to be lifted if the impounded amount is paid, a move that raises questions on
movements, misleading common investors
widens its probe to other entities and indices, the Jane Street case has become a flashpoint for deeper market reform
may well define the credibility of its surveillance systems in an era of high-speed, cross-border trades.(Disclaimer: Recommendations,
suggestions, views and opinions given by the experts are their own
These do not represent the views of the Economic Times)
