SEBI's revised settlement rules introduce new fees and faster procedures
What's the story
The Securities and Exchange Board of India (SEBI) has implemented its new Settlement of Administrative and Civil Proceedings Regulations, 2026. The updated framework, which came into effect on November 7, outlines how eligible individuals and entities can settle specific administrative and civil proceedings under securities laws. It replaces the SEBI (Settlement Proceedings) Regulations, 2018.
Fee structure
Applicants can now seek settlement at different stages
Under the new framework, applicants can seek settlement at different stages, subject to SEBI's eligibility criteria.
The regulations also prescribe a non-refundable application fee of ₹25,000 for natural persons and ₹35,000 for other applicants.
This fee is separate from the settlement amount payable by the applicant and has to be paid through a designated payment gateway.
Amount calculation
Minimum settlement amount specified for 1st-time and other applicants
The settlement amount is calculated using a specific formula, which takes into account the nature and seriousness of the alleged default, as well as other specified factors.
The minimum settlement amount is ₹3 lakh for first-time applicants and ₹7 lakh for others.
An application will not be considered if filed after 90 days from the date of service of show-cause notice or supplementary show-cause notice, whichever is later.
Notice process
Settlement notice before show-cause issuance introduced
The new regulations also provide for a settlement notice before issuing a show-cause notice.
This gives the concerned entity an opportunity to apply for settlement within 60 days of receiving the notice.
However, this mechanism doesn't apply where interim directions or prosecution are contemplated or in cases covered by specified exclusions under the regulations.
The issuance of a settlement notice doesn't guarantee acceptance of an application or that proposed enforcement action will remain unchanged.
Review procedure
Applications to be examined by internal committee
Applicants must submit the prescribed application form along with an undertaking, waivers, and the basis for calculating the proposed settlement amount.
The regulator can return an incomplete application, giving the applicant 15 days from communication to submit a revised and complete one.
Applications are examined by an Internal Committee and a High Powered Advisory Committee, with acceptance or rejection decided by a Panel of Whole Time Members.
Settlement details
Filing application won't prevent SEBI from issuing interim civil directions
The terms of the settlement may include the settlement amount, disgorgement of wrongful gains or losses averted or caused to investors, and remedial or regulatory requirements.
Disclosures may also be part of the settlement terms.
Filing an application doesn't prevent SEBI from issuing interim civil or administrative directions to protect investors or maintain market integrity.