SEBI revises settlement rules, launches fast‑track route for cases up to ₹10 lakh

The Securities and Exchange Board of India (SEBI) has introduced the Settlement Regulations 2026, bringing a new formula for calculating settlement amounts and a fast‑track mechanism for cases involving sums up to ₹10 lakh.

The market regulator said the updated framework aims to make settlements simpler, transparent, and predictable. Under the new rules, settlement terms will include the settlement amount, disgorgement of wrongful gains, and remedial or regulatory measures — previously known as non‑monetary terms.

The revised formula ensures wrongful gains are handled separately to avoid double counting. The settlement amount will now be linked to a base amount derived from the minimum penalty for the violation, adjusted for factors such as the stage of proceedings, gravity of the breach, and mitigating circumstances.

Two fast‑track categories have been introduced — violation‑based and monetary threshold‑based. Cases under ₹10 lakh will move directly from SEBI’s internal committee to a panel of whole‑time members for approval.

For violation‑based fast‑track settlements, SEBI will issue a notice offering entities the option to settle by paying the specified amount. Eligibility will depend on both the monetary threshold and the nature of the violation, including certain disclosure‑related breaches.

The new framework also covers cases involving financial misrepresentation or fund diversion, subject to remedial measures such as enhanced disclosures and recovery of diverted funds.