New Delhi — In a significant development in India’s financial sector, U.S.-based quantitative trading firm Jane Street has deposited $567 million into multiple escrow accounts, complying with directives from India’s market regulator, the Securities and Exchange Board of India (SEBI). This move is aimed at reversing the trading ban imposed on the firm earlier this month over allegations of market manipulation.
SEBI had barred Jane Street from participating in derivatives trading after identifying what it described as artificial inflation of the Bank Nifty index through coordinated transactions. The watchdog claimed that these trades allowed the firm to profit unfairly via options. Jane Street, however, maintains that its activities followed standard index arbitrage strategies and were not manipulative.
According to sources familiar with the matter, Jane Street's escrow deposit is a goodwill gesture as it seeks to restore its reputation and resume operations. SEBI will now review the request and examine whether the deposit satisfies the conditions for lifting the trading ban. Until a final decision is made, Jane Street has announced it will not re-engage in options trading in India.
Meanwhile, Indian equity markets opened slightly lower on Monday, with the Nifty 50 slipping by 0.25 percent to around 25,087 and the Sensex declining 0.31 percent to 82,244. The downturn was primarily led by weakness in the information technology sector, where major players such as Infosys, TCS, Wipro, and HCL Tech posted losses between 1 and 1.4 percent. Analysts attribute this weakness to global economic uncertainty and investor caution following fresh tariff-related headlines from the United States.
The Indian rupee also came under pressure, opening around 85.90 to 85.94 per U.S. dollar, down from Friday’s close of 85.80. This depreciation is linked to increased dollar demand by corporates and banks, coupled with global risk aversion sparked by former U.S. President Donald Trump's latest tariff announcements. Trump’s plan to impose 30 percent tariffs on select goods from the European Union and Mexico starting August 1 has added to investor concerns about an impending trade war.
Despite the pressure, some analysts believe the markets are beginning to see Trump’s tariff threats as negotiation tactics rather than concrete economic policy. Still, the rupee remains vulnerable, having briefly touched 85.97 during onshore trading before slightly rebounding.
The coming days are likely to remain volatile as investors await SEBI’s decision on Jane Street’s reinstatement, and global markets brace for U.S. inflation data and further developments on trade tensions.