New Delhi, July 7 Securities and Exchange Board of India (SEBI) Chairman, Tuhin Kanta Pandey, said on Monday that SEBI has all the powers to act against manipulative trading activities in the matter related to New York-headquartered trading major Jane Street Group, which is very evident from the interim order that has been issued to ban the global giant from the Indian stock market.
When asked whether there is a need to have more regulations to act against such entities, the Sebi Chairman quipped that the need was for enforcement and surveillance rather than more regulations and the “order in the Jane Street case speaks for itself.”
"Within the regulations only we have bought it. So, with regulations remaining the same it is enforcement and surveillance that can actually help. Excess regulations do not mean excess regulation. Those are two different things," Pandey remarked.
He highlighted that a great deal of analytical work went into the Jane Street case, as manipulative activities were done in many ways
"Manipulative practices can be worked out by different players in different ways. There is no one particular way in which you have to assess. Our regulations very clearly mention that manipulative and fraudulent practices are not allowed in the market and within the regulations SEBI has all the powers to investigate and act," Pandey explained.
"Obviously surveillance both at exchanges level and SEBI level will continue, and we will also upgrade those surveillance measures," said Pandey.
Jane Street has been barred by SEBI from the Indian stock market for indulging in manipulative trading practices that allegedly enabled the company to make unlawful profits.
Jane Street indulged in aggressive trading in the derivatives (futures) segment, where the firm executed trades to influence market prices by unfair means for making a fast buck.
SEBI described it as “non-neutral trading behaviour”, a strategic attempt to influence prices rather than simply engage with the market. And the tactic wasn’t random; it followed a well-known play in the trading world which is termed “marking the close.”
Jane Street is a proprietary trading firm, which means it trades with its own capital rather than managing client funds. The firm allegedly made a staggering Rs 32,681 crore in profits, by manipulating the stock market and repatriating the amount overseas.
Jane Street is understood to have used an extended ‘marking the close’ strategy — placing large and aggressive buy or sell orders near the end of the trading session, with the intention of artificially driving up the closing price of a stock or index. It later dumped these stocks with aggressive selling to rake in a quick profit which caused the price to crash and loss to those holding the stocks.
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