Jane Street Curbed in India After $4.3 Billion Trading Gain

Regulatory Action - India's market regulator SEBI is barring Jane Street from accessing its local securities market [1] - SEBI plans to seize $570 million in alleged unlawful gains from Jane Street following an investigation into derivatives trades [1] - This may be the biggest fine SEBI has ever imposed on a foreign entity for alleged market manipulation [3] Market Implications - India's derivatives to cash volume ratio is over 400 times, significantly higher than in the US, Germany, and other developed markets, indicating a potentially large impact on the derivatives market [4] - The action may have a low impact on the cash equity market [4] - There might be some impact on BSE and its IPO, potentially affecting its valuation [5] Context and Perspective - Jane Street was making $2.3 billion, which was more than 10% of their bottom line, highlighting the significance of the Indian market to the firm [5] - Market inefficiency exists in India due to low guardrails, which regulators are now trying to close [6] - The move is similar to actions taken by the SEC in the US [5]