SEBI Upgrading Surveillance On Derivatives Manipulation After Action Against Jane Street Hedge Fund

Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Monday (7 July) announced that the regulator is enhancing its surveillance systems to detect and address manipulation in derivatives trading, following recent findings against hedge fund Jane Street ,Business Standard reported.

Pandey noted that similar instances of manipulation are unlikely to be widespread, according to remarks shared with Reuters.

The board previously barred Jane Street and its affiliates from Indian markets over alleged manipulation of the Nifty Bank index. Pandey had warned on Saturday(5 July , 2025) that such market misconduct would not be tolerated.

Jane Street, which operates globally with 3,000 employees and trades equities in 45 countries, reportedly earned $5 billion (Rs 4.51 Lakh Crore) via equity options in India between January 2023 and March 2025, according to SEBI.

SEBI’s order stated that Jane Street drove up the banking index by buying large volumes of banking stocks and futures before offloading them, misleading retail investors and manipulating the market.

With retail participation surging in derivatives, SEBI has capped contract expiries and increased lot sizes to curb excessive trading. India now leads globally, accounting for nearly 60 per cent of 7.3 billion (Rs 6.06 Lakh crore) equity derivatives traded in April, per Futures Industry Association (FIA) data.

The developments come amid growing scrutiny of speculative trading patterns and their impact on market integrity. SEBI’s move to strengthen oversight reflects its broader efforts to maintain transparency and fairness, especially as India's derivatives markets expand rapidly. The regulator has signalled that any future violations will face strict regulatory action.