|
The Securities and Exchange Board of India (SEBI) on Friday announced that the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, will come into effect from November 7, introducing a framework for settling specified proceedings under securities laws.
The regulations were notified on October 8, 2026. "Settlement Regulations, 2026 shall come into force on 07.11.2026," SEBI stated in its release. To facilitate settlement applications, SEBI has introduced an online application facility, a settlement amount calculator, Frequently Asked Questions (FAQs) and a dedicated help desk. "For ease of understanding and filing of settlement applications," the regulator said it has made these facilities available on its official website. SEBI has also provided an explainer video demonstrating how applicants can use the settlement amount calculation facility. "Eligible persons may apply for settlement in accordance with Settlement Regulations, 2026," the regulator stated. According to the notified regulations, an entity may apply to settle specified proceedings at any stage, subject to compliance with the prescribed requirements. The regulations prescribe a non-refundable application fee of Rs 25,000 for natural persons and Rs 35,000 for other applicants. The settlement amount will be calculated using a formula that considers the base amount, stage of proceedings, regulatory action, gravity of the alleged violation, aggravating factors and mitigating factors. Under the framework, the minimum settlement amount has been fixed at Rs 3 lakh for first-time applicants and Rs 7 lakh for other applicants. The regulations also specify that applications concerning proceedings pending before SEBI must generally be filed within 90 days from the date of service of a show-cause notice or supplementary show-cause notice, whichever is later. However, this limitation will not apply to applications concerning specified proceedings pending before the Securities Appellate Tribunal or the Supreme Court. The framework further provides that certain proceedings may not be settled, including cases involving wilful defaulters, fraudulent borrowers or fugitive economic offenders. Proceedings involving violations with a market-wide impact, substantial investor losses or an adverse effect on market integrity may also be excluded from settlement, subject to the provisions of the regulations. The new regulations also introduce provisions for fast-track settlement, including violation-based and monetary threshold-based mechanisms. Under the monetary threshold-based fast-track settlement mechanism, applications involving settlement amounts of up to Rs 10 lakh, where no disgorgement or remedial and regulatory terms are involved, may be processed through the prescribed procedure. The regulations additionally provide for settlement with confidentiality, under which applicants offering substantial assistance in examinations, investigations, inspections or audits may be considered for confidentiality benefits, subject to specified conditions. The framework also provides for the constitution of an Internal Committee and a High Powered Advisory Committee to examine settlement applications and recommend settlement terms. The Panel of Whole Time Members will consider the recommendations and decide whether to accept or reject settlement applications. The regulations further provide that the SEBI (Settlement Proceedings) Regulations, 2018, will stand repealed upon commencement of the new framework, subject to the transitional and saving provisions. SEBI said the new regulations, along with the FAQs, settlement calculation facility, online application form and help desk framework, are available on its official website. (ANI)
|
