By Jayshree P Upadhyay

MUMBAI (Reuters) -India's markets regulator will tell a court this week that it sees no reason to release additional data and documents to Jane Street, two sources with direct knowledge of the matter said, after the U.S. firm appealed a securities trading ban.

The Securities and Exchange Board of India (SEBI) temporarily barred Jane Street in July, alleging the firm used its trading strategies to "manipulate" a key benchmark index of banking stocks, leading to losses for retail investors.

Jane Street denied the allegations and regained access to the Indian market by depositing a penalty amount. It also filed an appeal in India's Securities Appellate Tribunal (SAT) in September in which it sought additional data and documents.

SEBI's response, which has yet to be made public, will say that Jane Street's appeal represents a delaying tactic by the U.S. trading giant, one of the sources told Reuters.

"The documents and data being sought could also undermine the ongoing investigation," the second source added.

SEBI did not respond to an emailed request for comment.

A request for comment sent to Jane Street outside U.S. business hours was not immediately answered.

Reuters reported in July that SEBI is examining detailed data of trading by Jane Street across all Indian benchmark indexes from January 2023 to May 2025.

SEBI's ongoing investigation is looking for trading patterns similar to one flagged in the July order, where large positions were taken in constituents of an index in both the cash and futures markets, the second source said.