MUMBAI: Markets regulator Sebi’s Rs 4,850-crore disgorgement order against global algo-based trader Jane Street group and its temporary ban from Dalal Street – for market manipulation – is unlikely to deter proprietary (prop) firms from trading on domestic bourses. Rather, the clampdown is expected to improve compliance and corporate governance among brokerages and funds that trade with prop funds, market players said.Despite concerns about drop in futures & options volumes in the backdrop of the ban on the US-based foreign fund, Sebi remains steadfast about its stand about strict adherence to its rules by market participants and non-tolerance of any attempt of manipulation, its chairman said.One of the fallouts of the Sebi order was the sharp slide in the stock prices of some of the broking houses and market infra institutions that analysts feel would be affected by a drop in F&O volumes, at least in the short term.On Friday, the day after Sebi’s order was released, Nuvama Wealth Management that also has a broking arm, lost over 11% while Angel One, another tech-heavy financial services firm with a robust broking outfit, lost nearly 6%. Among the institutions, BSE, the biggest among the listed bourses, closed 6.4% down while CDSL, the biggest depository, lost 2.3%.Angel One chairman & MD Dinesh Thakkar said, in an email, that over the past few years, retail participation in India’s F&O segment had surged about 20 times, something that has fuelled liquidity, volatility, and opportunity. “Proprietary trading desks thrive in such environments, leveraging high-frequency and algorithmic strategies. With millions of active retail traders and deepening institutional activity, India’s market opportunity is structural and not cyclical. Also, this is not dependent on any one firm.”Sebi officials also feel that there should not be any major market impact from the enforcement action.”In the long run, the growth in market confidence, and a free and fair market, should aid responsible investing and capital formation,” a Sebi source said.
