๐ ๐ฎ๐ท๐ผ๐ฟ ๐ฅ๐ฒ๐ด๐๐น๐ฎ๐๐ผ๐ฟ๐ ๐ฆ๐ต๐ถ๐ณ๐: ๐ง๐ต๐ฒ ๐จ๐ฆ ๐ฆ๐๐ ๐ข๐ณ๐ณ๐ถ๐ฐ๐ถ๐ฎ๐น๐น๐ ๐ฅ๐ฒ๐บ๐ผ๐๐ฒ๐ ๐๐ต๐ฒ ๐ฑ๐ฌ-๐ฌ๐ฒ๐ฎ๐ฟ-๐ข๐น๐ฑ “๐๐ฎ๐ด ๐ข๐ฟ๐ฑ๐ฒ๐ฟ” ๐ผ๐ป ๐ฆ๐ฒ๐๐๐น๐ฒ๐บ๐ฒ๐ป๐๐
In a monumental policy reversal, the U.S. Securities and Exchange Commission has officially rescinded its long-standing “no admit / no deny” rule (Rule 202.5(e)).ย The press release is accessible here: https://lnkd.in/dHx9KCAN
Since 1972, parties settling SEC enforcement actions without admitting guilt were barred from publicly denying the allegations or challenging the SECโs factual basis.
Effective May 21, 2026, that changes. The SEC will now treat settlements as civil contracts, allowing parties to publicly defend their reputation, provide context, or even criticise the agencyโs theories after settlement.
The SEC cited 4 key reasons for this deregulation: 1. The rule had limited practical utility 2. Social media blurred the line between public and private speech 3. Alignment with the U.S. Department of Justice and other federal agencies 4. Faster, more efficient settlement resolution
Importantly, the SEC also stated it will not enforce existing no-deny provisions from prior settlements.
A major contrast can be seen in Indiaโs regulatory approach.
As the US SEC steps away from policing post-settlement speech, the Securities and Exchange Board of India (SEBI) approaches the “Admission of Fault” dynamic through a highly structured, systemic framework.
The SEBI (Settlement Proceedings) Regulations, 2018 has a dual-track model:
1. The “Neither Admit Nor Deny” Premium: SEBI allows entities to settle without admitting or denying guilt. However, it explicitly prices this privilege. Under SEBI’s mathematical calculation schedule, an applicant must apply a “Reputation Risk” factor multiplier (0.25) to their base settlement amount if they choose not to admit to the violations.
2. Settlement with Confidentiality (The Leniency Track): Chapter IX of SEBIโs regulations offers a formal track for immunity or leniency. But Confidentiality / leniency is available only with explicit admission and full cooperation.
The Takeaway: While the US SEC is moving toward contractual pragmatism and freedom of speech, SEBI maintains a formulaic, tightly policed equilibrium, proving that “buying peace” in the securities market looks very different depending on which side of the globe you operate.
For a deeper perspective on SEBIโs evolving settlement architecture, readers may also refer to a recent article co-authored by our Managing Partner, Mr. Sumit Agrawal, and Dr. M. S. Sahoo on reimagining SEBIโs consent settlement framework. The same is accessible here: https://lnkd.in/dpZ-RKWn
Readers may share their thoughts on info@regstreetlaw.com.
Sumit Agrawal Kavish Garach Akarsh Tripathi Aditi Sahu
