India’s markets regulator, SEBI, has unveiled a comprehensive rewrite of its settlement rules, aiming to make resolution of enforcement cases quicker and more cost-effective by simplifying procedures and recalibrating penalties.
India’s markets regulator has proposed a sweeping rewrite of its settlement rules, a move that could make it cheaper and faster for companies and individuals to close enforcement cases and avoid prolonged hearings. The Securities and Exchange Board of India says the plan is designed to trim litigation, simplify calculations and give parties more room to resolve disputes before they escalate.
According to the proposal, SEBI would scrap the 2018 settlement regulations and replace them with a new framework built around a simpler formula for settlement amounts. The regulator said it reviewed applications submitted over the past two years and found that rejected or withdrawn offers were, on average, about eight times higher than the eventual penalty. Under the new approach, that gap would narrow to roughly four times, helped by a recalibration of aggravating and mitigating factors and a stronger link between the stage of proceedings and the amount payable.
The draft rules also create a faster route for relatively small cases. Matters with settlement amounts of up to ₹10 lakh, provided they do not involve non-monetary terms, would bypass the High Powered Advisory Committee and go straight from an internal committee to a panel of Whole-Time Members. In most other cases, SEBI would issue a notice setting out the likely charges and give an entity 60 days to seek settlement before a show-cause notice is served. After that, applicants would have 90 days, rather than 60, to apply following a show-cause notice, and some rejected cases could later be revived if circumstances change.
SEBI is also seeking to ease the cost of retrying settlement. It wants to cut the extra charge for refiling after a withdrawal to 20 per cent from 50 per cent, remove an additional 20 per cent fee in some multiple-proceeding cases and standardise interest on disgorgement. The regulator said the changes reflect the view that settlement is often a quicker and more economically sensible outcome than drawn-out enforcement. Public comments are open until September 4, 2026.
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