SEBI tightens scrutiny of Wall Street giants operating in India
Sep 14, 2026
India's securities regulator is increasing its oversight of foreign financial firms. Prominent players like JPMorgan Chase and Jane Street face allegations of market manipulation. Regulators are now demanding accountability similar to US and European counterparts. This stricter approach targets lucrative opportunities in India's fast-growing economy. Global banks are upgrading compliance as India enforces its market conduct rules.
India is ramping up scrutiny of Wall Street traders with the nation’s securities regulator turning more aggressive in targeting even prominent foreign players like JPMorgan Chase & Co. in its $5 trillion stock market.
That push has been on display in recent days as the Securities and Exchange Board of India (Sebi) accused a Mauritius based JPMorgan unit of executing manipulative stock trades. Last year, in one of its most dramatic actions on a foreign firm, Sebi accused Jane Street of market manipulation, an allegation that the US financial giant has denied.
Sebi has signalled internally that it is getting more proactive in examining transactions by domestic and international traders as part of an effort to protect retail investors, according to people familiar with the matter, who asked not to be identified discussing a private matter.
Other global heavyweights, including Bank of America and investment giant Capital Group, have already found themselves in regulatory crosshairs in India this year. It’s a sharp contrast with earlier decades when foreign securities firms were rarely penalised in India. Now, Indian regulators are demanding a level of accountability more commonly associated with counterparts in the US and Europe.
The newer strictness comes at a time when global banks and traders have been chasing profits in what is one of the world’s fastest growing economies. Regulators are particularly focused on India’s options market, the world’s largest by contracts traded, where financial firms have been piling in to capitalise on lucrative arbitrage and market-making opportunities. Firms like JPMorgan have increasingly made bets around the Indian market, but that calculus has the potential to change as tighter rules curb volumes and regulatory scrutiny intensifies. Many firms are now scrambling to upgrade their local compliance levels in India, lawyers said.
“Sebi’s message is unambiguous: scale, reputation and global standing offer no shelter from India’s market-conduct rules,” said Pradyun Chakravarty, a partner at New Delhi law firm King Stubb & Kasiva. JPMorgan declined to comment. The Sebi order names a Mauritius unit that is separate from JP Morgan India Pvt., its local subsidiary. The order against the offshore entity, therefore, does not directly impact JPMorgan’s activities in India which are mostly conducted through its local unit.
Jane Street declined to comment. It has deposited more than $500 million in an es crow account to comply with an order from India’s securities regulator, and is pursu ing an appeal in an Indian court seeking access to additional documents.
Tuhin Kanta Pandey, who took over as Sebi’s chair last year, has put greater emphasis on using technology. As a result the regulatory body has begun to more closely track trades when there are sharp or unexplained swings in the market, the people familiar with the matter said, asking not to be named discussing information that isn’t public.Last month, Pandey said the regulator will have rules in place that are proportionate without compromising investor protection or market integrity.
The Indian regulator hasn’t singled out foreign firms. Domestic players have also been scrutinised with a local brokerage, Mansi Share and Stock Broking, being in vestigated alongside the JPMorgan unit. Still, international financial giants ap peared to enjoy more leeway in the past.
Sebi is attempting to signal that it welcomes global players to India, but no one will be exempt from punishment if they are seen as breaching rules, the people familiar with the matter said. Sebi didn’t respond to an email seeking comment.
“Regulators need to have teeth so that there is fear of non-compliance by investors,” said Ajay Shaw, senior partner at DSK Legal, a law firm in India. “The latest set of measures by Sebi penalising big global entities for deviations is a step in the direction.”This January, Sebi had sent Bank of America a show cause notice alleging employees shared non-public information about a 2024 block trade, Bloomberg News reported earlier this year, citing people familiar with the matter.
[The Economic Times]
