SEBI rejects Jane Street’s document request as delay tactic in derivatives case

The market regulator stated on October 6 that Jane Street’s demand for more information was intended to stall proceedings rather than address the core allegations. The case centres on the hedge fund’s trading activity involving a ₹4,370 crore position in index futures and a reverse position exceeding ₹32,000 crore in options, which SEBI claims allowed profit from the price difference.

According to SEBI’s advocate, Gaurav Joshi, the trading pattern — where losses were recorded by the Indian entity JSI and profits by the Singapore-based arm of the same group — does not constitute legitimate hedging under Indian regulations. He emphasized that foreign investors are barred from taking intraday positions in Indian stock markets under foreign exchange rules.

SEBI had previously issued interim orders and imposed a fine, which Jane Street paid. However, the firm appealed to the Securities Appellate Tribunal, asserting no manipulative intent and requesting further documents to mount its defence.

SEBI countered that it had already provided all relevant material referenced in the show-cause notice, along with over 10 GB of supplementary data, and that Jane Street’s request for additional documents exceeded what is legally required at this stage of the investigation.

Joshi argued that allowing access to documents still under SEBI’s review would compromise the integrity of the probe. He maintained that the hedge fund’s focus appeared to be on investigating SEBI’s conduct rather than responding to the allegations against it.

The tribunal proceedings are set to continue on October 7, with Jane Street’s representatives expected to present their statements in the days following.