American property firm Jane Street has some futures and options trades under investigation. The National Stock Exchange (NSE) will examine these derivative deals. People associated with this case gave this information to Moneycontrol. Jane Street is one of the world’s major property firms. It does transactions worth millions of crores of dollars. Gen Street Singapore PTE is registered as Foreign Portfolio Investor (FPI) in India. Custodians of his funds will also be investigated.
Proportive firm is called a firm that trading for themselves instead of a client. Actually, the NSE surveillance system had identified some special derivative deals of Jane Street. The NSE had found that some trades of Jane Street were matched with the same counterpart and then reverse. This means that Jane Street revealed his trading position in a very short time. This was done much higher or much lower than the earlier price.
The NSE sent a notice to the Custodian Bank of Jane Street in January about this. In response, Custodian Bank and Jane Street had said that the deals that were asked about were Mashim based. There was no human intervention in them. Custodian Bank and Jane Street had said that this trade was not done for any purpose. NSE is the first level regulator of the stock market. He has the right to issue notice to trading members, custodians and other registered participants on any trade.
A source associated with the case said, “All big players of F&O have many AI models. These models use different criteria for trades. Sometimes two different models take contrasting positions about the same situation. It is also that the same algo does separate trade on micro-second level movements.” He said that not only Jane Street but there are four more foreign portfolio investors who have received NSE notice. They are in the process of responding to the notice.
The email was not replied to the NSE and Jane Street about this. This case has come to light at a time when the functioning of Jane Street in India is increasing rapidly. Its funds are showing great interest in India’s derivative markets. The interest of domestic and foreign investors in the derivative segment of Indian markets has increased considerably in the last few years. Market regulator SEBI has expressed concern over this. He has also taken several steps to control it.
