US-based hedge fund Jane Street has asked the Securities Appellate Tribunal to direct the Securities and Exchange Board of India (Sebi) to hand over correspondence between the market regulator and National Stock Exchange relating to a study by the stock exchange on Jane Street’s trades.
In a hearing on Friday, the lawyer representing Jane Street said that two studies conducted by Sebi and NSE in 2024 had cleared the hedge fund against any manipulation in its trades in the Indian stock market. However, Sebi subsequently set up an inter-department team in December 2024 to further examine similar trades by Jane Street.
The documents are important to Jane Street’s defence against Sebi’s allegations of market manipulation and could explain why the regulator pursued a fresh investigation despite two earlier reviews finding no evidence of manipulation, its lawyer said.
The appeal points to earlier probes, including a November 2024 review by the NSE and a December 2024 review by Sebi’s Integrated Surveillance Department (ISD), which reportedly found no evidence that Jane Street’s trades influenced index prices to benefit its options positions and advised against pursuing the matter further.
Despite those findings, the market regulator, through an ex-parte interim order in July 2025, barred Jane Street from the Indian stock market and directed it to disgorge unlawful gains of ₹4,843 crore.
Sebi alleges Bank Nifty manipulation
It accused Jane Street of executing strategies that distorted the Bank Nifty index and harmed retail investors. The regulator alleged that the firm bought large quantities of Bank Nifty constituents in cash and futures markets to artificially support the index while simultaneously building short positions in index options.
The firm said the NSE report examined 16 months of the 27-month period later covered by Sebi’s July 2025 order, while the ISD report covered 17 months of the total investigation period in the order.
Jane Street also referred to a complaint by a UAE-based hedge fund that allegedly led Sebi to constitute the inter-departmental team.
“And we believe the complaints were made by a UAE-based hedge fund, who not only filed a complaint, but had a personal meeting with the whole-time member,” said the hedge fund’s lawyer. “We want to know why Sebi pushed aside a report by NSE, going into it in detail, and it is a report by its own integrated surveillance department and decided to have yet another investigation. What was so stunning about this complaint that it received?”
The matter will be next heard on 5 October.
