A three-member appeals court bench will hear arguments between Jane Street Group LLC and India's market regulator on Tuesday, in a closely watched case with far-reaching implications for the world's largest equity derivatives market.

Justice P.S. Dinesh Kumar, presiding over the Securities Appellate Tribunal, will decide whether to hear Jane Street's appeal against the Securities and Exchange Board of India's July interim order accusing the US trading behemoth of manipulative practices.

Key Highlights

• Jane Street appeals trading ban, claiming SEBI withheld crucial documents essential for its defense in India.
• The firm seeks SAT intervention for transparency, after SEBI’s intensified probe and $567 million penalty.

The New York-based firm filed an appeal last week, claiming that SEBI denied it access to critical documents needed to defend against the allegations. It also requested that no further regulatory action be taken until its appeal is resolved.

The case has become an important dispute between one of Wall Street's most successful trading firms and the regulator of the world's largest derivatives market by contract volume. Its outcome could have an impact on other global quantitative players operating in India, including Jump Trading, Citadel Securities, and IMC Trading.

On Tuesday, Jane Street is expected to request a pause in the investigation if the court determines that SEBI is obstructing its defense by failing to share certain documents. Typically, the first hearing establishes a timeline, with the court summoning the market regulator to respond to the allegations at a later date.

According to Abhiraj Arora, a Mumbai-based partner at law firm Saraf and Partners, both Jane Street and SEBI are primarily concerned with the issue of an interim stay. The tribunal is likely to grant interim relief, directing the regulator to respond to the US firm's appeal, he said.

Jane Street has requested access to documents, including emails between SEBI and Mayank Bansal, a Dubai-based hedge fund manager who is widely believed to have informed the regulator about the US firm's trades in India.

It is also looking for emails from the regulator and the National Stock Exchange of India Ltd. Jane Street claimed in court documents reviewed by Bloomberg that these communications were withheld due to their lack of relevance to the investigation.

In its appeal, the firm also claimed that SEBI's surveillance department had already reviewed its trading activity in December and discovered no evidence of manipulation. The NSE had reached similar conclusions a month before.

Also Read: US Firm Jane Street Challenges SEBI's Market Manipulation Allegation in Court

SEBI may argue that internal communications "are independent of their decision to start a second investigation" earlier this year, according to Mindspright Legal's managing partner, Akshaya Bhansali. "SEBI could say that the NSE report was not relied upon while passing the interim order," she pointed out.

India's derivatives market has emerged as a hotspot for global high-speed trading firms, with volumes increasing in the years following the pandemic due to an influx of millions of new individual traders. Retail traders lost approximately $12 billion dabbling in futures and options in fiscal 2025, according to a SEBI report released earlier this year, primarily to sophisticated trading firms.