Jane Street Under NSE Scanner for Suspicious Derivatives Trades

Global trading giant Jane Street has come under the radar of the National Stock Exchange (NSE) for certain suspicious Futures & Options (F&O) trades in India. According to sources familiar with the matter, NSE’s surveillance system flagged a pattern in derivative trades that led to a formal probe.

Trades Triggered Red Flags

The focus of the investigation is Jane Street Singapore Pte, which operates as a registered Foreign Portfolio Investor (FPI) in India. Alongside the fund, its custodian is also reportedly being examined as part of the ongoing scrutiny.

NSE’s systems identified trades in the derivatives segment that were matched and then reversed quickly with the same counterparties.

This pattern, where positions are reversed in a very short span of time, and often at prices far above or below the previous trade, raised concerns about possible market manipulation or unusual trading behavior.

What’s Being Probed?

The key concern is whether these trades were genuine hedging strategies or if they were designed to distort prices or volumes in the F&O segment. NSE’s surveillance unit flagged the unusual trading behavior based on real-time data monitoring, which triggered the internal review.

Reversing trades at distorted price levels in a short time can disrupt market integrity, and such actions typically prompt regulatory attention in highly regulated markets like India.

While no official statement has been released yet by either Jane Street or the NSE, people aware of the development confirmed that the matter is currently under active examination.

Jane Street’s Presence in India

Jane Street, globally known for its high-speed algorithmic and proprietary trading strategies, operates in markets around the world, including India, through its FPI license. It is considered one of the most influential players in the derivatives and ETF trading space globally.

The Road Ahead

This investigation underscores NSE’s increasing focus on ensuring transparency and fair play in the derivatives market.

If any wrongdoing is confirmed, it could lead to tighter controls or penalties under the purview of market regulations. For now, all eyes remain on the NSE’s next steps and any official findings from the probe.