SEBI Launches Revised Settlement Framework for Regulatory Proceedings
New rules introduce updated fee structures, fast-track mechanisms, and strict 90-day filing deadlines.
1Revised Regulatory Framework
The Securities and Exchange Board of India implemented new settlement regulations on November 7, 2026, replacing the 2018 framework. These rules govern how individuals and entities resolve administrative and civil proceedings. The regulator introduced an online portal, a settlement amount calculator, and detailed FAQs to assist applicants in navigating the updated compliance requirements.
2Application Fee Structure
Applicants must pay a non-refundable fee to initiate the process, distinct from the final settlement amount. Natural persons are charged 25,000 rupees, while other entities must pay 35,000 rupees. This fee is mandatory for all submissions, regardless of the complexity or the specific nature of the alleged regulatory violation being addressed.
3Settlement Amount Calculation
The final settlement amount is determined by a formula incorporating the base amount, proceeding stage, and gravity of the violation. Factors such as aggravating and mitigating circumstances are also considered. The total payment cannot fall below the established minimum thresholds of 3 lakh or 7 lakh rupees, ensuring consistent regulatory financial enforcement.
4Standard Filing Deadlines
Under Regulation 4, applicants generally have 90 days from the service of a show-cause notice to apply for settlement. For cases already pending as of November 7, 2026, a transitional provision allows applications until February 4, 2027. However, these transitional applications incur a 20% surcharge over the standard calculated settlement amount.
5Fast-Track Settlement Options
SEBI introduced two fast-track mechanisms to expedite resolution. Violation-based fast-track applies to delayed disclosures, requiring applications within 30 days. Monetary threshold-based fast-track applies when the settlement amount is under 10 lakh rupees. These cases bypass the High Powered Advisory Committee, moving directly to the Panel of Whole Time Members for final review.
6Pre-Notice Settlement Mechanism
A new settlement notice mechanism allows eligible parties to apply before a formal show-cause notice is issued. Applicants have 60 days from receiving this notice to submit their request. This option is unavailable if the regulator contemplates prosecution or interim directions, highlighting the importance of early engagement with the board's administrative processes.
7Exclusions and Restrictions
Certain categories remain ineligible for settlement, including wilful defaulters, fraudulent borrowers, and fugitive economic offenders. Proceedings involving market-wide impact or large-scale investor losses are also restricted unless specific remedial terms are met. SEBI retains the authority to reject applications if the applicant fails to comply with the prescribed requirements or settlement conditions.
8Procedural Oversight and Impact
Applications are reviewed by an Internal Committee and potentially a High Powered Advisory Committee before reaching the Panel of Whole Time Members. Filing an application does not halt interim civil or administrative directions. This framework aims to maintain market integrity while providing a structured path for resolving pending regulatory and civil disputes.