Sebi Cracks Down on Foreign Firms Over Market Manipulation

The Securities and Exchange Board of India (Sebi) has increased its scrutiny of Wall Street giants operating in the country, particularly those that have been engaging in market manipulation or other irregularities. The regulator has accused a Mauritius-based unit of JPMorgan Chase & Co. of executing manipulative stock trades, which is just one example of its more aggressive approach to regulating foreign firms.

According to sources familiar with the matter, Sebi has signaled internally that it will be examining transactions by both domestic and international traders more closely as part of an effort to protect retail investors. This push for greater accountability comes at a time when global banks and traders have been seeking profits in India's rapidly growing economy.

Regulators are particularly focused on India's options market, which is the world's largest by contracts traded. Firms like JPMorgan have been making bets around the Indian market, but tighter rules and increased regulatory scrutiny may curb their volumes and profitability.