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SEBI Settlement Rules Get Major Overhaul
7 Nov
Summary
- New SEBI settlement regulations came into force November 7, 2026.
- Application fees range from ₹25,000 to ₹35,000, separate from settlement.
- Settlement applications are due within 90 days of show-cause notice.
The Securities and Exchange Board of India's (SEBI) revised Settlement of Administrative and Civil Proceedings Regulations, 2026, became effective on November 7, 2026. These regulations establish a new framework for individuals and entities to resolve specified administrative and civil proceedings under securities laws. The previous 2018 regulations have been superseded, with transitional provisions in place.
Under the new framework, applicants can seek settlements at various stages, adhering to SEBI's eligibility criteria. A non-refundable application fee of ₹25,000 for natural persons and ₹35,000 for others is required. The settlement amount is calculated using a formula considering factors like the stage of proceedings and the gravity of the alleged default, with minimum amounts set at ₹3 lakh for first-time applicants and ₹7 lakh for others.
For proceedings pending before SEBI, settlement applications must generally be filed within 90 days of the show-cause notice. Transitional provisions offer a 90-day window from November 7, 2026, for certain pending cases, albeit with a 20% higher settlement amount. SEBI may also issue a settlement notice before a show-cause notice, allowing entities 60 days to apply for settlement.
Post-application, SEBI's Internal Committee and High Powered Advisory Committee review submissions before the Panel of Whole Time Members makes a final decision. Applicants can withdraw applications before a decision, and refiling rejected applications is permitted under specific conditions, both incurring an additional 20% settlement amount.
