How Jane Street allegedly manipulated index closing on expiry days

The Securities and Exchange Board of India (Sebi) has raised allegations against Jane Street for manipulating index closings on expiry days. According to Sebi, the firm engaged in substantial buying of Bank Nifty futures in both the futures and cash segments. This activity reportedly coincided with significant selling of Bank Nifty options, suggesting a strategic maneuver to influence market indices. Sebi's investigation suggests that Jane Street's trading patterns were designed to create artificial price movements. By executing large transactions in these segments, the firm allegedly aimed to sway the closing prices of the index in their favor. Such practices, if proven, could undermine market integrity, affecting fair price discovery and investor confidence. Jane Street has yet to respond publicly to these allegations. Meanwhile, Sebi continues to scrutinize trading activities to ensure compliance with market regulations. This case highlights the ongoing challenges regulators face in maintaining transparent and fair trading environments amidst sophisticated trading strategies.

— Authored by Next24 Live