“I do know these guys are good mathematicians and PhDs, however we are able to have PhDs from our aspect. We aren’t constrained,” Pandey informed The Monetary Instances.
Pandey additionally rejected Jane Road’s defence that it was engaged in normal index arbitrage. “Manipulation is the place you might be artificially creating arbitrage,” he stated.
Sebi eyes structural reforms in derivatives market
The Sebi Chair informed The Monetary Instances that India’s booming derivatives market wanted “structural reforms”, and stated the regulator was analyzing methods to strengthen protections for retail traders.
“[The] derivatives market wants some structural reforms,” he informed FT, noting that whereas volumes have declined, “to not the extent that’s fascinating”.
In accordance with Sebi information, India’s choices market accounted for practically 90% of worldwide volumes final yr. However a current regulator report stated 9 out of ten particular person merchants misplaced cash buying and selling choices.
The variety of particular person contributors doubled to 9.6 million between March 2022 and March 2025, with annual losses swelling from $4.7 billion to $12.2 billion. Sebi has since tightened entry norms and launched different reforms that introduced down the variety of energetic merchants by 20% year-on-year as of June.
Pandey informed The Monetary Instances that Sebi is making an attempt to “sensitise” traders “not to enter” dangerous futures and choices segments. Nonetheless, he stated the regulator has no intention of stifling the market. “We’ve at all times stated this by-product market is essential for us, there’s no means we are going to kill the market. You develop the market, you don’t kill it.”
Jane Road fallout
Sebi’s July order towards Jane Road accused the U.S.-based agency of manipulating index actions, significantly in Nifty and Financial institution Nifty, on expiry days to revenue from giant choices positions. The regulator alleged the agency took outsized bets within the money and futures markets to maneuver costs in its favour, calling the technique a “sinister scheme”.
In accordance with Sebi, Jane Road earned over Rs 36,500 crore in India between January 2023 and March 2025, Rs 43,289 crore from index choices, and losses of Rs 7,687 crore within the money and futures markets.
One such occasion cited occurred on January 17, 2024, when the agency allegedly purchased Rs 4,370 crore price of Financial institution Nifty shares and futures within the morning, triggering an index rally. Whereas holding bearish choices positions, it reversed the trades within the afternoon, inflicting a pointy decline and incomes Rs 734.93 crore that day alone.
The buying and selling ban imposed on Jane Road was lifted after the agency deposited roughly Rs 4,844 crore in an escrow account. The regulator continues to research.
Jane Road, in keeping with the Monetary Instances report, stated in an inside memo that it plans to problem Sebi’s order, which it described as “extraordinarily inflammatory.” The U.S. based mostly agency is reportedly partaking constructively with the regulator and has sought an extension to reply to the interim order issued on July 3.
Trying forward, Pandey informed FT that Sebi expects the variety of particular person traders in Indian markets to succeed in 400 million by 2030, up from round 130 million in the present day, pushed by a brand new technology that’s “much less inclined to go to the financial institution and extra inclined to go to the market”.
Additionally learn | NSE reaches Rs 40 crore settlement with Sebi over information disclosure case
(Disclaimer: Suggestions, solutions, views and opinions given by the specialists are their very own. These don’t symbolize the views of the Financial Instances)
