New Delhi, July 11 -- As the Indian market watchdog accuses global trading giant Jane Street of market manipulation, the firm's alleged defence-that its trades were legitimate arbitrage-now faces an unprecedented test.

The 3 July order of the Securities and Exchange Board of India (Sebi) draws on detailed market data, highlighting patterns in Bank Nifty trades, price impacts and rapid reversals to argue Jane Street's conduct crossed the line from aggressive arbitrage into manipulation.

Experts believe Jane Street could counter Sebi's allegations with transparent trading logic and data. It might also rely on the regulatory dialogue after repeated warnings. They believe this case could redefine the legal threshold of "manipulative intent"...