BSE, NSE in focus as Jane Street halts India trading despite regulatory clearance

Global trading giant Jane Street has told Reuters that it has “ceased trading in India at present,” even though it remains permitted to operate in the country. The decision comes amid heightened regulatory attention and follows a formal probe launched by the Securities and Exchange Board of India (SEBI) in April 2024 into its trading activities.

According to sources, the National Stock Exchange (NSE) had begun sharing data and analysis on Jane Street with SEBI as early as November 2023, after a surveillance alert flagged unusual trading activity. This coincided with SEBI’s preliminary probe into the U.S. high-frequency trader’s derivatives operations.

The investigation, however, faced hurdles. Market sources told Reuters that SEBI struggled with the massive and complex datasets generated by Jane Street’s high-speed trades. In the interim, retail investors — many of them low-income — bore heavy losses, with SEBI data showing a $21 billion wipeout in derivatives trading over the three years to March 2024.

SEBI had earlier flagged abnormal patterns in some Jane Street trades and expressed concern over the rapid entry of inexperienced investors into India’s booming options market, now the world’s largest by volume. However, officials were cautious about imposing restrictions — such as income thresholds for derivatives trading — fearing they might disrupt market sentiment.

The halt in Jane Street’s activity marks a significant moment for both the Bombay Stock Exchange (BSE) and NSE, as it removes one of the more prominent global players from India’s derivatives arena, at least temporarily.

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Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.

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