SEBI Gave Jane Street 21 Days, Now the Trading Giant Wants 6 More Weeks - Here's Why

Jane Street Group LLC, the US-based proprietary trading firm, is seeking an additional six weeks from the Securities and Exchange Board of India (SEBI) to prepare its defense in a high-profile market manipulation case.

The firm is under regulatory scrutiny over controversial trades in Indian equity options, part of what SEBI suspects may have been an attempt to distort market prices by exploiting thin liquidity in cash and futures segments.

A person familiar with the matter said that while Jane Street has formally requested a six-week extension, SEBI is considering a shorter extension, likely around four weeks. The regulator had initially given the trading firm 21 days to respond to its preliminary findings, a deadline that expired last week.

Interim Relief and Escrow Deposit
The dispute escalated earlier this month when SEBI temporarily barred Jane Street from trading. That ban was lifted last week after the firm deposited ₹48.4 billion (approximately $556 million)  the alleged “unlawful gains”  into an escrow account.

In a statement issued Monday, Jane Street said it is engaging “constructively” with the regulator and confirmed it had requested more time to respond to SEBI’s interim order dated July 3. The firm, however, declined to elaborate further.

Internal Pushback: Jane Street Disputes SEBI’s Claims
Internally, Jane Street has reportedly told its employees that SEBI’s findings include “many erroneous or unsupported assertions” about its trading activities in India.

The company insists that its trades were legitimate and driven by “outsized demand from retail investors,” according to a Bloomberg News report on Tuesday.
 

What Happens Next
The final decision on whether to grant more time lies with SEBI board member Ananth Narayan, who signed the July 3 interim order. Once Jane Street submits its official response, Narayan is expected to review the arguments and issue a new directive. That decision could either reaffirm the original findings or set a revised timeline to complete the investigation.

SEBI declined to comment on the matter, while Jane Street maintained its stance of constructive engagement.

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(With Inputs From Bloomberg)