πΊπ¬π©π° ππππππππ πππ πππ πΊπππππππππ πΉππππππππππ, 2026
SEBI notifies the new Settlement Regulations which repeal the SEBI (Settlement Proceedings) Regulations, 2018, and take effect on the day after the 30th day from publication in the Official Gazette. Here are the major changes:
- A new formula for the settlement amount : Settlement Amount = Base Amount Γ (S + R + G + A β M) wherein, S is the stage of the proceeding, R is the regulatory action factor, G is gravity, A is aggravating factors and M is mitigating factors.
- Disgorgement is calculated separately : Wrongful gains, losses avoided and losses caused to investors are no longer built into the Base Amount. Where they can be quantified, they are disgorged separately, which ends the earlier double counting. Interest is 9% p.a., rising to 12% p.a. after a final order, and there is no interest on interest.
- A settlement notice before the SCN : SEBI will now send a settlement notice before issuing a show cause notice. The entity then has 60 days to apply. No notice is sent where interim directions or prosecution are contemplated.
- More time to apply after an SCN : The window to file after an SCN goes up from 60 days to 90 days.
- Fast-track : Cases with a settlement amount up to βΉ10 lakh, and no disgorgement or remedial terms, go straight from the IC to the Panel of WTM. They skip the HPAC.
- A one-time window : For 90 days from commencement, entities can apply to settle pending proceedings if they never applied, or if their earlier applications were rejected, returned or withdrawn under the 2018 Regulations. These settlements carry an extra 20%.
- Serious cases can now be settled : This covers misrepresentation of financial statements and diversion or siphoning of funds. Settlement is subject to “Remedial and Regulatory Terms”, the new name for non-monetary terms. These terms include disclosures and bringing back diverted funds with interest. Market-wide impact and investor loss are no longer absolute bars if they can be adequately remedied.
- Transition for pending applications
- Terms already approved by the Panel of WTM continue under the 2018 Regulations.
- Where the HPAC has made its recommendation, the applicant has 30 days to choose between the old and new regimes.
- All other applications go to a fresh IC meeting under the 2026 Regulations.
Anyone facing pending SEBI proceedings, including those whose earlier settlement applications failed, should take a fresh look at settlement under the new regime. Regstreet had submitted its detailed comments to SEBI and had also written extensively in newspapers.