00:00One of our top stories for India, Bloomberg has learned that Jane Street has deposited $564 million in an escrow account to comply with an order from India's securities market regulator.
00:10This comes after the trading giant had been banned from India's market over allegations of index manipulation.
00:16Our senior Asia Equities reporter Abhishek Vishnu is joining us now from Singapore.
00:20So, Abhishek, what are we learning here?
00:22Well, you know, sources are telling us that Jane Street has deposited $564 million in an escrow account to comply with the July 3rd order of India's markets regulator.
00:36They have now got the right to resume trading, but sources are also telling us that they won't be resuming trading, at least on the options side.
00:44What this means is that, you know, this is one step ahead in, you know, Sebi versus Jane Street on that alleged manipulation.
00:53And Jane Street now, you know, does not mean that it's not going to fight.
00:57It's still going to fight the case, but they have deposited the amount.
01:00They are going with what regulator had as advised.
01:04In terms of India's ecosystem, I'd say, you know, from my talks, this appears to be a bit more positive for the exchanges as well as for, you know, the brokers because this entity or the entities that Jane Street was using,
01:23they might now be more easily, you know, unwinding trades or resuming business as and when they want, which means turnover or concerns around options activity that were existing right after this order that may, they may evaporate.
01:40Other than that, it also means that, you know, that this case is moving forward.
01:46There might be an earlier resolution than what most are expecting.
01:50Remember, Sebi takes around a year and a half to some cases, five years to, you know, come to conclusion in investigation.
01:59And this includes a lot of entities which are outside of India, a foreign investor.
02:04And, you know, it gets a bit convoluted because other government agencies also get involved.
02:09So given that now that Jane Street has deposited this money, they have the right to resume trading, but they are not, sources are saying that they won't, at least on the options side.
02:20And that's happening because if you remember the order and what Sebi had said, profits were made largely from options side of the trade and losses were made on the futures side.
02:32So, you know, that's where, you know, the second bit of information that the Jane Street is not planning to resume option trading becomes important.
02:42Now, we, our reporters have also approached both the entities, Jane Street as well as Sebi, but we haven't heard anything from them so far.
02:53Abhijek, when it comes to what the next steps are and what we could expect to hear, what are you seeing?
02:59Well, one would be possible news flow around unwinding of trades that Jane Street currently has, possible news flow on what Jane Street's plan is, you know, whether they'll work with Sebi initially or, you know, they'll go to SAT, the Sebi Appellate Tribunal, immediately.
03:21Or, you know, they'll do the two things, you know, alongside each other.
03:27There might also be some news flow on, you know, who is representing which side, what is Sebi learning.
03:33So, these are the next things that we should watch out for.
03:36In terms of longer time frame, you know, beyond Jane Street versus Sebi, I mean, this case would definitely impact the regulations, the guardrails India has in place for, you know, HFTs.
03:47The tech market infrastructure side of India, you know, would, is most likely to see a sea change, especially in terms of guardrails, you know, a relook of order routing systems,
03:59a relook of technologies involving co-location data feeds, which are primarily, you know, are responsible for HFTs getting an edge over the smaller investors.
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