Jane Street Deposits $567 Million in Escrow Account With SEBI

July 14, 2025 – Jane Street has deposited $567 million or Rs 4843.5 crore in an escrow account with SEBI. SEBI had ordered it to deposit this amount if it wants to resume trading in Indian markets. Jane Street has added that it will contest the SEBI’s allegations. It will contest on the ground that what it did was not unfair market manipulation but what is called basic index arbitrage trading.

Compliance Unlocks Trading Ban

SEBI had previously barred the firm from participating in securities markets, citing alleged unlawful gains. The regulator mandated Jane Street to deposit the amount in an escrow account with a lien marked in SEBI’s favour. Upon fulfilling this condition, SEBI allowed the firm to resume its trading operations.

Sources close to the development confirmed that the deposit was made on Friday. Also allowing Jane Street to meet SEBI’s primary condition. With this, a key chapter in the high-profile regulatory case, one that drew widespread attention in global financial circles, has effectively come to a close.

Interim Order Conditions

SEBI’s interim order issued on July 3 came with a set of strict conditions:

• Clause 62.1 required Jane Street to deposit the alleged illegal gains into an escrow account held at a scheduled commercial bank in India.
• Clause 62.2 enforced a complete trading ban, prohibiting the firm from buying or selling securities in any form directly or indirectly.
• Clause 62.11 stated that all restrictions would be lifted once the firm complied with the deposit condition.

SEBI also directed all key financial intermediaries , including banks, custodians, depositories, registrars, and transfer agents, to halt any movement of Jane Street’s assets until the escrow deposit was officially confirmed.

Strict Future Oversight

Although the trading ban is lifted, SEBI’s order remains clear: Jane Street must “cease and desist from any fraudulent, manipulative or unfair trade practices.” The firm is barred from using any of the patterns previously flagged by the regulator. This includes specific trading strategies SEBI deemed non-compliant with market regulations.

Even with this compliance, Jane Street cannot redeploy the trading strategy SEBI identified in the interim order. It remains uncertain whether the firm will immediately re-enter the market or adopt a more cautious, phased strategy.

Investigations May Continue

While Jane Street has contested SEBI’s interpretation, arguing in a memo that the regulator misunderstood standard hedging practices, regulatory scrutiny is far from over. There are reports that SEBI may investigate Jane Street’s trades in Sensex options, and the Income Tax Department may also initiate a probe.

Importantly, SEBI’s order allows for a post-hearing review. If Jane Street provides a justifiable defense and ongoing investigations clear it of manipulation, the impounded amount may be released, and all trading restrictions could be lifted permanently.

Meanwhile, market sentiment may stabilize with Jane Street’s return, though regulators and investors are expected to watch closely for any further developments. The firm’s next moves will be crucial in determining its compliance track record moving forward.

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