Jane Street barred from Indian markets as regulator freezes $566M

Not really.

In this case it was Millenium ratting out on Jane Street (edit - other way around), but now the entire HFT (Edit: hedge funds. Thanks for the callout avvt4avaw) industry is under extreme scrutiny by SEBI as a result [0]

[0] - https://www.sebi.gov.in/enforcement/orders/jul-2025/interim-...

Yes as presented this behavior is clearly illegal. The next interesting question is if such an obviously illegal strategy was in use by JS, and they also produced the likes of SBF&co, what other related manipulation activity are they partaking in?

This behavior became common in the Indian market after the newer HFTs (Edit: hedge funds. Thanks for the callout avvt4avaw) in the Indian market like Millenium, Jane Street, Citadel, and others setup shop, and explains a LOT of the market weirdness that happened last year. DE Shaw India has been a much smarter player in Indian equities.

Jane Street's kvetching about Millenium showed the spotlight and now everyone will be getting the hammer ("iss hamam mein sabh nange hain"). Jane Street was also dumb enough to do this during the General Election, so now Indian regulators have to do something. This plus the Adani prosecution is a quick win to restore confidence in SEBI.

Didn't Jane Street sue Millenium first? I think the lesson of all this is - don't sue over your trading strategy secrets.

I think you might be right. It was such a juvenile and petty squabble.

And on top of that - don't make such squabbles public during a GENERAL ELECTION, thus forcing politicans to cleanup shop.

Same thing happened to Adani Group, as their scandal hit during the run up of the 2024 GE.

Now both Adani Group and the HFT industry are under severe scrutiny due to the upcoming Bihar Elections, which is used a sandbox to test messaging by the opposition and incumbents in preparation of the next General Election and other state elections.

I’m speaking broader than that. It’s impossible to move a lot of money without secondary effects. Any pretense that does not give you advantages is misleading.

This is a very weird use of terminology. None of Jane Street, Millennium or Citadel are High Frequency Traders (HFTs). Jane Street is a prop trading firm who engages in market making, but is not primarily known for HFT - they are grey box (i.e. human-in-the-loop) which on the spectrum of market making strategies, is pretty much the opposite end from HFTs. Other firms in this bracket include SIG and DRW.

Millennium and Citadel are both hedge funds, who do not engage in market making at all. They are most similar to other multi-strategy hedge funds like Balyasny or Point72.

You may be thinking of Citadel Securities, who are a market making firm and do engage in high frequency trading. Other large and well known HFT firms include Hudson River Trading, Tower Research, Jump Trading, Virtu, IMC and Optiver.

Any pretense that does not give you disadvantages is misleading. Small shops and retail don't have to worry about e.g. slippage like the big guys do when taking positions. Big shops can work out custom instruments sometimes but on the other hand they also need them a lot more, as trying to pick up adequate hedging in derivatives mkts could wind up with yet more slippage. Etc.

Yup Jim Simons from the Renaissance hedge fund fame kept saying that: there are a shitload of (legal btw) strategies that do work with smallish amounts but they stop working once you get big.

Yes, and so it’s a misnomer when we talk about whether a big player is manipulating or not. They are.

>This behavior became common in the Indian market after the newer HFTs (Edit: hedge funds. Thanks for the callout avvt4avaw)

You weren't wrong. All market making is now electronic and all electronic market making is done at a speed only available to HFT firms, so the previous comment reply to yours saying that Jane Street is a market maker but not HFT, is more than a little silly. The Citadel being referred to here in this reporting is also the market making (hence HFT) one, so their attempted correction on that made little sense either.

I'm not a domain expert in this space, and have used HFT to refer to these firms simply due to their technical trading nature. I appreciate the explanation! The closest I've ever been to this industry was bombing an FPGA optimization interview at Citadel eons ago, but I also don't like humidity or snow for 9 months in a year, but I do like Malort and Hyde Park - such is life.

Jokes aside, I appreciate callouts and/or corrections!

Oh, well, I'm not a domain expert in this space. I'm a VC - my job is to be confidently wrong ;). The closest I've ever been to this industry was bombing an FPGA optimization interview at Citadel eons ago, but I also don't like humidity or snow for 9 months in a year, but I do like Malort and Hyde Park - such is life.

All I know is a set of firms like Millenium, Citadel, Jane Street, etc ki gaand phatne wale hain. You don't pull these kinds of shenanigans during or in the run-up to General Elections, Bihar Assembly Elections, or UP Assembly Elections. People have been screwed over for less.

I don't see how elections are relevant here. And also, in India every year there is some kind of election. If not Bihar, then West Bengal

> I don't see how elections are relevant here

Everything revolves around elections in India. It is a highly political environment and elections are a big business (just getting a party ticket nomination to campaign for an MLA seat itself costs around $10-20 million).

And the public sentiment against big business in India has gotten much stronger lately due to the past several years of inflation. Jibes against Adani and the stock market crash in 2024 after the General Election solidified that view.

> If not Bihar, then West Bengal

West Bengal state elections don't matter - it's not a swing state, and the local TMC has removed any breathing room for other parties like the BJP, INC, or CPIM in the WB political arena.

Bihar on the other hand is a swing state which is up for grabs this year due to the succession crisis within the ruling JD(U), and it's election is always used as a petri dish for messaging and campaigning across Hindi-speaking North India.

The Bihar and UP state elections always set the tone for the General Election. The others are important, but nowhere near as important.

I still don't see how banning JS will benefit BJP in next election. The avg Indian wouldn't even know what Jan Street does.