SEBI Settlement Regulations 2026

Recently, the Securities and Exchange Board of India (SEBI) notified the ‘Settlement Regulations, 2026’, which introduce a new formula for calculating settlement amounts and launch a fast-track mechanism for eligible cases up to Rs. 10 lakh.

Key Highlights

Terms of Settlement: Under the new rules, settlement terms will include the settlement amount, disgorgement of ill-gotten gains (where applicable), and remedial and regulatory measures, which were previously termed non-monetary terms.
New Formula: The settlement amount will now be linked to a base amount determined in relation to the minimum penalty specified for the violation. The stage of proceedings, gravity of the violation, and legal costs will also be taken into consideration.
Rs. 10 Lakh Threshold: Cases where the settlement amount is Rs. 10 lakh or less will be directly referred from the Internal Committee to the Panel of Whole-Time Members of SEBI under a prescribed procedure.
Avoidance of Double Counting: Ill-gotten gains will be excluded from the base amount and will be dealt with separately through recovery/disgorgement.
Two Fast-Track Categories: Both violation-based and monetary threshold-based fast-track settlement mechanisms have been introduced.
Eligibility: Eligibility for the fast-track mechanism will depend on both the monetary threshold and the nature of the violation.