India SEBI Enhances Derivatives Surveillance After Jane Street Ban

India's Securities and Exchange Board (SEBI) is enhancing its surveillance systems to detect and address manipulation in derivatives trading following an investigation into U.S. firm Jane Street, which was barred from the Indian markets for allegedly manipulating the Nifty Bank index. SEBI accused Jane Street of artificially inflating the banking index by purchasing large volumes of banking stocks and futures before offloading them, misleading retail investors and profiting from options positions. The regulator seized $567 million from Jane Street and plans to widen its investigation across other exchanges and indexes. With India accounting for nearly 60% of global equity derivatives trading, driven significantly by retail participation, SEBI has also imposed limits on contract expiries and increased lot sizes to curb excessive speculative trading. SEBI Chairman Tuhin Kanta Pandey indicated such cases may not be widespread but emphasized that market misconduct will face strict regulatory action to maintain transparency and fairness as the derivatives market expands rapidly. These measures reflect SEBI's broader effort to uphold market integrity amid growing scrutiny of speculative trading patterns.