The Securities and Exchange Board of India (SEBI) has barred US trading entity Jane Street and three of its related entities from accessing the market, directing them to deposit illegal gains of Rs 4,843.5 crore in an account in favour of the markets regulator.

In its order, the regulator has also directed a debit freeze on the bank accounts of these entities, which include JSI2 Investments Private Ltd, Jane Street Singapore Pte. Ltd and Jane Street Asia Trading Ltd.

According to the SEBI order, Jane Street earned Rs 43,289.33 crore in profits through trading in index options on Indian exchanges between January 1, 2023, and March 31, 2025.

As per the order, Jane Street on 14 expiry days used to heavily buy Bank Nifty futures in huge amounts as well in the cash segment and sell Bank Nifty options in big numbers -- all in the morning.

After noon, the Jane Street entities used to aggressively sell large amounts in Bank Nifty futures and influence the closing of the index on expiry days.

According to the SEBI order, in the morning of January 17, 2024, Jane Street aggressively bought Bank Nifty futures worth Rs 4,370 crore and sold Bank Nifty options for Rs 32,115 crore. After noon, it aggressively sold large amounts in Bank Nifty in the underlying futures for Rs 5,372 crore.

This created a peak short position of Rs 46,620 crore in the Bank Nifty index options segment and led to a softer closing of Bank Nifty.

Jane Street made a profit of Rs 735 crore in the options segment, and made an intraday loss of Rs 61.6 crore in cash and futures. Thus, it made a clear-cut gain of Rs 673.4 crore on that expiry day.

The market regulator passed the order as part of enforcement action. It applies to all Jane Street Group entities operating in India and restricts their ability to trade or participate in any market-related activity.

"Entities are restrained from accessing the securities market and are further prohibited from buying, selling, or otherwise dealing in securities, direct or indirect," SEBI said in an order.

Jane Street has disputed the findings of SEBI's interim order and will further engage with the regulator.