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

(www.cnbc.com)
518 points bwfan123 | 12 comments | 06 Jul 25 14:03 UTC | HN request time: 0.214s | source | bottom
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cs702 ◴[06 Jul 25 20:47 UTC] No.44483909[source]▶
According to Indian regulators, every trading day Jane Street would:

1) buy large volumes of stocks and/or stock futures that are part of an index tracking India’s banking sector, early in the day,

2) subsequently place large options trades, betting that the index would decline or volatility would spike later in the day, and

3) later in the day, cash out of the large long positions, dragging the index lower, making far more money on the options trades than on the long positions.

Jane Street can and likely will claim the firm was only arbitraging away pricing inefficiencies, nothing more, nothing less. It was just business as usual, etc., etc.

However, given the scale of the operation, Jane Street's actions sure look like textbook market manipulation. Calling it like I see it.

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1. Den_VR ◴[06 Jul 25 21:25 UTC] No.44484194[source]▶
Maybe, but given the reputation of Indian regulators I’m skeptical Jane Street’s only sin was the alleged market manipulation.

People may recall the matter involving Adani Group. https://hindenburgresearch.com/adani-update-sebi/

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2. dyauspitr ◴[06 Jul 25 21:28 UTC] No.44484217[source]▶
Seems presumptive to slander an entire nations regulatory group on a single/couple of examples. By that metric the regulatory group in the US is completely bought out since they let 2008 happen.
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3. sealeck ◴[06 Jul 25 21:40 UTC] No.44484328[source]▶
There's a difference between "letting" something happen and actively doing something – it shows very different intentions. The events of 2008 were also caused by a cascading system failure involving lots of different components, which are hard for a single human to fully understand. The actions of the Indian regulator in the Adani case are much simpler, and their motivation is straightforward.
replies(1): >>44484359 #
4. dyauspitr ◴[06 Jul 25 21:45 UTC] No.44484359{3}[source]▶
One rotten regulator doesn’t mean you get to view the entire Indian regulatory environment as unreliable though. It’s the 4th/5th largest financial market in the world.
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5. Den_VR ◴[06 Jul 25 21:46 UTC] No.44484365[source]▶
Slander? Now there’s a strong word.

Examples of the 2023-2025 activities of the Indian securities regulator SEBI seem pretty relevant to current news involving SEBI here in 2025. Which is the topic of discussion. Whatever US regulators were doing in 2008 has nothing to do with this.

6. Den_VR ◴[06 Jul 25 22:03 UTC] No.44484496{4}[source]▶
Is SEBI not the key regulator in this area?

To say it plainly, SEBI has been exposed for their selective enforcement on high-profile entities. If Jane Street’s in trouble with SEBI then it’s only because they failed to secure the same privileges as Adani, or Karvy, or Ramkrishna, or Sapre, or Kamath.

7. CPLX ◴[06 Jul 25 22:21 UTC] No.44484633[source]▶
> By that metric the regulatory group in the US is completely bought out since they let 2008 happen.

Not sure that makes the point you think it makes.

8. throwaway2037 ◴[07 Jul 25 00:56 UTC] No.44485638[source]▶

    > Seems presumptive to slander an entire nations regulatory group on a single/couple of examples.
How about Germany's BAFIN regulator after VW's Deiselgate or Wirecard bankruptcy? BAFIN's response was weak and slow in both cases. I am willing to slander them for "just" those two mistakes.
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9. fastball ◴[07 Jul 25 01:02 UTC] No.44485675{4}[source]▶
Does the size of a market have some positive impact on the reliability of its regulatory body that I am not aware of?
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10. dyauspitr ◴[07 Jul 25 06:03 UTC] No.44487209{5}[source]▶
Yes, trust. Fully gamed systems will not have large willing participants.
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11. fastball ◴[07 Jul 25 06:05 UTC] No.44487216{6}[source]▶
A market being large doesn't mean it has large participants.

But even then (and as seems to be the case in this instance), the market might have large participants because they are the ones doing the gaming, and are therefore happy to participate (even if trust is low).

12. Lionga ◴[07 Jul 25 08:49 UTC] No.44488131{3}[source]▶
That is not slander, you are being more then generous with them. BAFIN's employees were trading Wirecard for profit to skim profits, not just "weak and slow". Calling them highly corrupt is probably a fair statement and not slander