BSE shares rally 3% after Jane Street said to have received clearance to resume trading in India

Shares of stock exchange BSE Ltd climbed as much as 2.9% on Monday to Rs 2,519 on the NSE after a report said that U.S. trading giant Jane Street has been allowed to re-enter the domestic markets after it fulfilled the Securities and Exchange Board of India’s (Sebi’s) direction to deposit alleged “unlawful gains” of Rs 4,844 crore in an escrow account before July 14.

Jane Street has received formal communication from Sebi confirming that the restriction on its access to Indian securities markets has been lifted, according to a Business Standard report. This follows the July 3 interim order that had specified that “upon deposit compliance, the restriction on accessing the securities market will cease to apply.”

The report cited sources saying that Sebi last week notified the New York-based firm via email that the ban had been withdrawn. However, exchanges are expected to monitor Jane Street’s future dealings closely on an ongoing basis.

A return after a seismic probe

The regulator’s nod marks a turning point in one of the most high-profile enforcement actions in Indian capital market history. Earlier this month, Jane Street was barred from trading in Indian markets after Sebi alleged the firm was involved in large-scale manipulation of index movements, particularly on expiry days in the derivatives segment.

The impact was immediate. The National Stock Exchange saw a steep drop in index options premium turnover, a key gauge of risk appetite in the F&O market. On July 17, the weekly expiry day, turnover slumped to Rs 39,625.77 crore, down 35% from the June average of Rs 60,605 crore. Expiry-day volumes continued to slide through July in the absence of Jane Street’s trading heft.

Alleged expiry-day manipulation, Rs 36,500 crore in gains

Sebi’s probe revealed that Jane Street booked Rs 36,502.12 crore in profits between January 2023 and March 2025. This included Rs 43,289 crore from index options and losses of Rs 7,687 crore in cash and futures trading. Of this, Rs 4,840 crore was ordered frozen by the regulator, which termed the gains “unlawful.”

The watchdog alleged that Jane Street engineered expiry-day index movements, running “by far the largest risks in ‘cash equivalent’ terms in F&O,” and engaging in trades that were “prima facie being manipulative” due to the “intensity and sheer scale of their intervention.”

On January 17, 2024, the firm earned Rs 734.93 crore in one day through what Sebi said was a deliberate “pump-and-dump” strategy. It “aggressively bought Rs 4,370 crore worth of Bank Nifty stocks and futures in the morning” while holding bearish positions in options. Later in the day, it reversed the trades, “triggering a sharp index fall” and raking in massive profits.

Sebi said that of 18 expiry-day trades it reviewed, 15 displayed signs of manipulation. The firm allegedly used aggressive orders in over 40 large-cap stocks, including Reliance, TCS, SBI, HDFC Bank and Infosys, to sway index levels, misleading retail investors who took the moves at face value.

Regulator's warnings and response

Despite being cautioned by Sebi in February 2025 through a letter relayed by the NSE, Jane Street continued its strategy. While the exchange closed its probe after hearing from Indian partner Nuvama, Sebi pressed ahead, citing continued violations and systemic risk to market integrity.

Last week, Jane Street requested Sebi to lift the ban, saying it had complied with the escrow directive. Sebi acknowledged the application and began evaluating it under the terms of the July 3 interim order.

With the restriction now lifted, Jane Street is free to resume trading in Indian markets. But its return comes with heightened scrutiny. Exchanges are expected to maintain continuous oversight of the firm’s activity to prevent further disruptions to the market.

Also read | Jane Street scandal wipes out 35% of index options premium turnover on NSE

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