Trading firm Jane Street fires fresh salvo at SEBI
What's the story
Global trading firm Jane Street has filed an appeal with the Securities Appellate Tribunal (SAT), arguing that it voluntarily refrained from new trades even after SEBI's restrictions were lifted. The firm had deposited ₹4,843.5 crore in an escrow account as per SEBI's direction. In its petition, Jane Street accused SEBI of ignoring its prior submissions and failing to provide regulatory guidance on "large" delta exposures.
Document dispute
Jane Street alleges withholding of crucial documents by SEBI
Jane Street also alleged that SEBI withheld several important documents, email communications, and annexures mentioned in its internal notes. The firm claimed some of these were sent after NSE and SEBI's Integrated Surveillance Department (ISD) reports had cleared it of any wrongdoing. Despite this, SEBI changed its position later on. Jane Street further contended that the regulator ended the inspection process without granting access to what it called "the most relevant and material documents."
Trading rights
Firm challenges delay in restoring trading rights
Jane Street has also challenged SEBI's delay in restoring its trading rights after the escrow deposit was made. The firm argued that the July 3 interim order had mandated an automatic lifting of restrictions upon deposit. However, it took SEBI 10 working days to restore these rights despite receiving ₹4,843.5 crore in an account marked in its favor. The firm claimed this delay was unfair and violated procedural fairness principles.
Market manipulation
What did SEBI's July order say?
In its July 3 interim order, SEBI accused Jane Street of manipulating index options by leveraging its financial strength and trading technology to manipulate prices on expiry days in both futures and cash markets. The regulator alleged this led to an "egregious distortion" of fairness in the securities market, marking a rare instance where multiple liquid shares with high retail participation were allegedly manipulated for index option positions.