SEBI’s Disclosure Dilemma in Enforcement Actions Sparks Legal Debate

The legal tussle between Jane Street and India's Securities and Exchange Board (SEBI) has brought regulatory transparency into sharp focus. At issue is whether SEBI must disclose surveillance reports that contradict its enforcement actions, even when such documents weren't formally cited in rulings.

Market experts highlight a growing tension between regulatory prerogatives and defendant rights. "SEBI can't selectively withhold exculpatory evidence," notes Ashutosh Srivastava of SKV Law Offices, referencing a December 2024 report that allegedly cleared Jane Street. The regulator's traditional practice of limited disclosure now faces Supreme Court mandates requiring all materially relevant documents be shared.

Legal specialists observe SEBI retains legitimate protections for confidential third-party data, but caution against overreach. Alay Razvi of Accord Juris states: "Blanket nondisclosure won't withstand judicial scrutiny when internal divisions exist within SEBI's own surveillance apparatus." The outcome may redefine transparency standards for financial regulators globally.