India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), is expanding its ongoing investigation into alleged index manipulation by Jane Street. Initially focused on the National Stock Exchange (NSE) indices—namely the Nifty 50 and Bank Nifty—SEBI will now examine possible distortions in the Bombay Stock Exchange’s (BSE) Sensex options contracts as well, according to a report citing people familiar with the matter.
The shift to include BSE’s flagship index underscores the regulator’s concern over the growing popularity of Sensex-based derivatives and the systemic risk posed by coordinated manipulation across exchanges.
SEBI’s Interim Orders: Market Ban and Asset Freezes for Jane Street Entities
SEBI recently issued a sweeping interim order against Jane Street and three affiliated entities, barring them from accessing Indian capital markets and instructing them to deposit alleged illegal profits totaling ₹4,843.5 crore. The order also imposed a debit freeze on their Indian bank accounts.
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According to SEBI, Jane Street amassed ₹36,671 crore in profits between January 2023 and March 2025 through suspected manipulative trades that allegedly distorted index movements on derivatives expiry days. The trades appeared to trigger artificial moves in benchmark indices—impacting derivative valuations and misleading market participants.
SEBI emphasized that while its findings are preliminary, the magnitude and complexity of the suspected violations warrant immediate interim restraints to protect market integrity and investor confidence. “If illegal gains are diverted during the course of a long investigation, the damage to the market could be irreparable,” SEBI noted in its order.
Jane Street, meanwhile, has denied all allegations, stating that their trading operations comply with Indian laws and market norms.
Tax Authorities May Join Investigation Under GAAR Framework
In a parallel development, the Income Tax Department is reportedly examining the case for possible violations of India’s General Anti-Avoidance Rules (GAAR) and permanent establishment provisions. A report indicated that tax officials are assessing whether Jane Street used any loopholes to sidestep tax liabilities on the alleged illegal gains.
If confirmed, this could further tighten the noose around the US-based trading firm, with implications not just under securities law but also under international taxation frameworks.