Jane Street faces off with India market regulator in court

A three-member appeals court bench will begin hearings on Tuesday between Jane Street Group LLC and India’s market regulator, in a closely watched case with broad implications for the world’s biggest equity derivatives market.

Justice P.S. Dinesh Kumar, presiding at the Securities Appellate Tribunal, will consider whether to admit Jane Street’s appeal against a July interim order by the Securities and Exchange Board of India, which accused the US trading giant of manipulative practices.

The New York-based firm filed its appeal last week, claiming SEBI denied it access to crucial documents needed to defend against the allegations. It also sought a halt on further regulatory action until its appeal is resolved.

The case has become a flashpoint between one of Wall Street’s most successful trading firms and the regulator of the world’s top destination for derivatives by contracts traded. Its outcome could have implications for other global quantitative players such as Jump Trading, Citadel Securities, and IMC Trading operating in India.

On Tuesday, Jane Street is expected to ask the bench for a pause in the investigation if the court decides it needs more time to assess whether SEBI is obstructing its defense by not sharing some documents. Typically, the first hearing sets a roadmap, with the court summoning the market watchdog to respond to the allegations at a later date.

The main focus for both Jane Street and SEBI is the question of an interim stay, according to Abhiraj Arora, a Mumbai-based partner at law firm Saraf and Partners. It’s likely that the tribunal will grant interim relief, directing the regulator to respond to the US firm’s appeal, he said.Jane Street has sought access to documents including emails between SEBI and Mayank Bansal, a Dubai-based hedge fund manager who is widely reported to have alerted the regulator about the US firm’s trades in India. It is also seeking emails between the regulator and the National Stock Exchange of India Ltd. Jane Street alleged in court documents reviewed by Bloomberg that these communications were withheld on grounds of irrelevance to the investigation.

In its appeal, the firm also argued that SEBI’s surveillance department had already reviewed its trading activity and in December found no evidence of manipulation. The NSE reached similar findings a month prior.

SEBI may argue that internal communications “are independent of their decision to start a second investigation” earlier this year, said Akshaya Bhansali, managing partner at Mindspright Legal. “SEBI could say that the NSE report was not relied upon while passing the interim order,” she said.

India’s derivatives market has become a hotspot for global high-speed trading firms after volumes soared in the years following the pandemic thanks to an influx of millions of new individual traders. Retail traders lost about $12 billion dabbling in futures and options in fiscal 2025, a SEBI report showed earlier this year, mainly to sophisticated trading firms.