SEBI Unveils New Settlement Rules, Fast-Track Route For Cases Up To ₹10 Lakh

The Securities and Exchange Board of India (SEBI) has announced new settlement rules to streamline the resolution of securities law violations. These changes, introduced on October 6, include a revised calculation formula for settlement amounts and fast-track procedures for eligible cases. The Settlement Regulations, 2026, establish a distinct mechanism for recovering wrongful gains and introduce accelerated settlement processes.

Under the revised framework, settlement terms encompass settlement amounts, disgorgement of wrongful gains, and remedial and regulatory terms. Settlement amounts will be determined based on a base figure linked to the minimum penalty for the violation, adjusted according to various factors such as the stage of proceedings, gravity of the violation, and legal costs.

Importantly, wrongful gains, avoided losses, and investor losses will not be included in this base amount and will be recovered separately through disgorgement where quantifiable.

SEBI has created two fast-track settlement categories: monetary threshold-based for cases involving settlements up to ₹10 lakh, and violation-based for specific breaches. For monetary threshold cases, eligible matters will move directly from SEBI's internal committee to a panel of whole-time members for settlement. Entities may settle by paying the specified amount, and the panel will issue the order upon receipt of payment.

This allows settlement of matters involving financial statement misrepresentation or fund diversion, subject to corrective measures. SEBI anticipates that these reforms will enhance transparency, predictability, and efficiency while maintaining deterrence against violations.