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Key Points

Zerodha CEO Nithin Kamath praised SEBI for taking action against Jane Street's alleged market manipulation. He warned that India's derivatives market could suffer if prop traders exit due to stricter oversight. The US firm reportedly made massive profits through questionable options strategies. Kamath noted the next few days will reveal how dependent Indian markets are on such players.

Key Points: Nithin Kamath Praises SEBI Action Against Jane Street Market Manipulation

  • SEBI accuses Jane Street of Bank Nifty manipulation via options trades
  • Kamath warns of market volatility if prop traders exit
  • Jane Street allegedly profited Rs 43,289 crore in 2 years
  • India's F&O volumes heavily rely on prop trading firms
2 min read

Jane Street can't get away in India thanks to SEBI: Nithin Kamath

Zerodha CEO Nithin Kamath commends SEBI for cracking down on Jane Street's alleged Bank Nifty manipulation while warning of market impact.

"You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation. - Nithin Kamath"

New Delhi, July 4

Zerodha co-founder and CEO Nithin Kamath on Friday praised the Securities and Exchange Board of India (SEBI) for taking strong action against US-based trading giant Jane Street, saying that India’s robust regulatory framework does not allow market practices that are common in the West.

In a post on social media platform X, Kamath said: "None of these practices would be allowed in India, thanks to our regulators", referring to US market structures like dark pools and payment for order flow -- mechanisms often criticised for favouring hedge funds at the expense of retail investors.

Kamath’s comments came in the wake of SEBI’s interim order accusing Jane Street and its group entities of manipulating the Bank Nifty index using complex intra-day strategies.

The regulator found that the firm booked massive profits of over Rs 43,289 crore between January 2023 and March 2025, largely through options trades, by artificially inflating and then dragging down the index -- especially on expiry days.

Kamath noted the severity of the alleged manipulation, saying: "You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation."

He added that the firm’s continued actions even after alerts from the exchanges point to how accustomed some players are to the lenient oversight in other jurisdictions.

However, Kamath also raised concerns about the potential downside of the action. He pointed out that proprietary trading firms like Jane Street contribute nearly 50 per cent of India’s options trading volumes.

If they decide to pull back in light of SEBI’s crackdown, retail participation -- which makes up about 35 per cent -- could also take a hit.

"This could be bad news for both exchanges and brokers," Kamath contended.

He further remarked that the next few days would be crucial in understanding how dependent the Indian market is on large prop trading firms.

“F&O volumes might reveal just how reliant we are on these prop giants,” he added.

- IANS

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Reader Comments

S
Sarah B
As someone who trades in both US and Indian markets, I must say SEBI's oversight is much stricter than SEC. But Nithin Kamath raises valid concerns - what happens to liquidity if these firms exit? Tough balance to maintain.
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Ananya R
₹43,289 crore profit in just 2 years?! This is daylight robbery of retail investors. SEBI should impose heavy penalties and ban them permanently. Our hard-earned money is not their plaything!
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Karthik V
While I appreciate SEBI's action, we must also ask why our exchanges allow such complex derivatives that can be manipulated. Simple equity markets would be better for common investors like us.
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Michael C
Interesting perspective from Nithin Kamath. In US, PFOF is standard practice but clearly has drawbacks. India's regulatory approach might be better for small investors in long run, even if it reduces some trading volumes.
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Priya S
As a Zerodha user, I trust Nithin's analysis. But I worry - if prop firms leave, who will provide liquidity? Retail investors like me need deep markets. Maybe SEBI should find middle path with stricter monitoring instead of driving them away.

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