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SEBI Revamps Settlement Rules: Formula-Based Amounts, Fast-Track Route Introduced
M
Moneycontrol•24-09-2026, 18:39
SEBI Revamps Settlement Rules: Formula-Based Amounts, Fast-Track Route Introduced
- •SEBI approves new settlement framework with formula-based calculation for settlement amounts and a fast-track route for less serious violations.
- •The new SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, will replace the 2018 regulations, introducing settlement terms including settlement amount, disgorgement of wrongful gains, and remedial and regulatory terms (RRT).
- •A new formula, Settlement Amount = Base Amount × (S + R + G + A − M) + Legal Costs, will determine settlement amounts, considering factors like minimum penalty, stage of proceedings, and gravity of default.
- •The framework expands access to settlement, allowing 60 days for applications after a Wells Notice and increasing the post-show-cause notice application period to 90 days from 60.
- •A one-time 90-day window is provided for entities to settle pending proceedings under the new regulations, even if previous applications were rejected, with an additional 20% settlement amount.
Key Questions Answered
SEBI's new formula calculates the settlement amount as: Settlement Amount = Base Amount × (S + R + G + A − M) + Legal Costs, where the base amount links to the minimum prescribed penalty with various multipliers.
The time available to file a settlement application after being served with a show-cause notice has been increased from 60 days to 90 days.
The 90-day window is available for entities that either did not apply earlier or whose previous applications were rejected, withdrawn, or returned under the 2018 framework, subject to an additional 20% settlement amount.
