The Securities and Exchange Board of India (SEBI) has implemented a new settlement framework effective from November 7, 2026. This new framework will allow eligible individuals and entities to resolve specific regulatory actions through a structured system. These revised rules include provisions for online applications, a settlement amount calculator, and expedited settlement in certain cases.
SEBI had issued the notification of this change on October 8. This new regulation, called the 'Settlement Regulation for Administrative and Civil Proceedings 2026', will replace the existing 2018 settlement framework, incorporating transitional and savings provisions.
To simplify the application process, SEBI has launched an online settlement application facility, a settlement amount calculator, Frequently Asked Questions (FAQs), and a dedicated help desk. The regulator has also released an explanatory video to help applicants understand how the settlement amount is calculated.
According to SEBI, eligible persons can apply for settlement under the Settlement Regulation, 2026. Under this framework, eligible applicants can request the settlement of determined actions in various stages, provided they meet the prescribed conditions.
As per the rules, the non-refundable application fee is set at ₹25,000 for general citizens, while it is ₹35,000 for other applicants. The minimum settlement amount is set at ₹3 lakh for first-time applicants and ₹7 lakh for other applicants.
However, the final amount will depend on several factors, including the original amount, the stage of the action, the nature and severity of the alleged violation, the regulatory action, and mitigating or aggravating circumstances. Applications related to proceedings pending before SEBI must generally be submitted within 120 days of receiving a show cause notice or supplementary show cause notice, but this timeline does not apply to special actions pending before the Securities Appellate Tribunal or the Supreme Court.
The new rules introduce violation-based and monetary limit-based fast-track settlement procedures. Under the monetary limit mechanism, applications with a settlement amount up to ₹10 lakh can qualify for expedited processing without any waiver, remedial measures, or additional regulatory conditions.
Some serious violations are excluded from the settlement framework. These include cases involving willfully defaulting debtors, fraudulent debtors, and absconding economic offenders. Based on the regulations, actions that threaten market-wide outcomes, significant investor losses, or market integrity may also be excluded.
Additionally, this rule allows settlement with confidentiality benefits for applicants who provide assistance in investigations or audits under certain conditions. The settlement application will be reviewed by an internal committee and a high-powered advisory committee, which will recommend appropriate terms. Subsequently, a panel of full-time members of SEBI will decide whether to accept or reject the application. The objective of this changed framework is to maintain safeguards against serious violations in the securities market while simplifying regulatory settlements.
