On Oct. 8, 2026, IND SEBI notified the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, published in the gazette on Oct. 7, 2026.
An entity may apply to settle a specified proceeding at any stage, with a non-refundable fee of INR 25k for natural persons and INR 35k for others.
Proceedings must not be settled while an examination, investigation, inspection or audit on the cause of action is pending, except applications involving confidentiality.
Proceedings of willful defaulters, fraudulent borrowers and fugitive economic offenders must not be settled either.
Subject to reg 18(2), proceedings may not be settled if the default has market-wide impact, caused losses to many investors or affected market integrity.
The settlement amount is the base amount times the sum of stage, regulatory action, gravity and aggravating factors less mitigating factors, with a floor of one.
It must be at least INR 300k for first-time applicants or INR 700k for others; the base amount is the minimum statutory penalty times an applicant-type multiplier.
The regulations come into effect on the day after the 30th day from their gazette notification, which is Nov. 7, 2026.
Document dated Oct. 8, 2026, received from IND SEBI Oct. 12, summarized Oct. 14.
On Aug. 14, IND SEBI proposed revisions to settlement proceedings.
IND SEBI proposed Settlement of Proceedings Regulations, 2026 as part of its review of the existing 2018 settlement mechanism.
Background
IND SEBI found that, excluding outliers, unsuccessful settlement amounts averaged about eight times the penalties ultimately imposed.
The proposals are intended to reduce this to about four times while retaining deterrent value.
The review incorporates stakeholder feedback and HPAC input, and IND SEBI cites court and Securities Appellate Tribunal decisions supporting settlement as a means of achieving faster resolution and reducing litigation.
Proposal
IND SEBI proposes simplifying and rationalizing settlement amount calculations.
Replaces existing methodology with a new approach that continues to reflect factors such as the stage of proceedings, regulatory history, base amounts, and aggravating and mitigating factors.
Effectiveness
Comment period for the consultation closes on Sep. 4, 2026.
Oct. 2026 Settlement Regulations Notified
On Oct. 8, 2026, IND SEBI notified the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, published in the gazette on Oct. 7, 2026.
An entity may apply to settle a specified proceeding at any stage, with a non-refundable fee of INR 25k for natural persons and INR 35k for others.
Proceedings must not be settled while an examination, investigation, inspection or audit on the cause of action is pending, except applications involving confidentiality.
Proceedings of willful defaulters, fraudulent borrowers and fugitive economic offenders must not be settled either.
Subject to reg 18(2), proceedings may not be settled if the default has market-wide impact, caused losses to many investors or affected market integrity.
The settlement amount is the base amount times the sum of stage, regulatory action, gravity and aggravating factors less mitigating factors, with a floor of one.
It must be at least INR 300k for first-time applicants or INR 700k for others; the base amount is the minimum statutory penalty times an applicant-type multiplier.
The regulations come into effect on the day after the 30th day from their gazette notification, which is Nov. 7, 2026.
Document dated Oct. 8, 2026, received from IND SEBI Oct. 12, summarized Oct. 14.
Regulators
IND SEBI
Entity Types
B/D; Depo; Exch; IA; Inv Co
Reference
Nt SEBI/LAD-DOP/2026/318, 10/8/2026; CP, 8/14/2026
