SEBI settlement regulations 2026 in force: formula fines, fast-track, online filing

The Securities and Exchange Board of India's (SEBI) new settlement regulations came into force on Saturday, 7 November 2026, replacing the SEBI (Settlement Proceedings) Regulations, 2018. The rules decide how a company, broker or individual accused of breaking securities law can end a case by paying an amount and agreeing to conditions, without admitting or denying guilt. The new framework replaces a table-based calculation with a single formula, adds two fast-track routes and lets applicants file online, using a settlement amount calculator, FAQs and a help desk that SEBI has set up.

A settlement, also called a consent order, is a way for SEBI and the person it has charged to close a case quickly. The regulator saves the time and cost of a full hearing, and the applicant avoids a long legal fight and a possible penalty order.

The main change is predictability. Under the 2018 rules, the settlement amount was worked out from tables. The 2026 rules use one formula built from a base amount and a set of aggravating and mitigating factors. Both kinds of factor are now capped at five, each worth 0.20, where mitigating factors were earlier capped at three. Applicants can estimate the likely amount with SEBI's online calculator before they apply, which should reduce back-and-forth with the regulator.

The fast-track routes are meant for simpler, lower-value cases, so they can be closed faster. Separating disgorgement, the return of wrongful gains, from the settlement amount makes it clearer what portion is a penalty and what is simply giving back money that was not earned lawfully. The 90-day filing window gives those served a notice a fixed period to decide whether to settle. That limit does not apply to certain matters pending before the Securities Appellate Tribunal or the Supreme Court.

Peepals timeline: The regulations were notified in the first week of October 2026 and published in the Official Gazette on 7 October. They took effect on 7 November 2026. Applicants with cases still pending under the 2018 rules may, within 90 days of commencement, ask for their case to be processed under the new framework by paying an additional 10% of the amount worked out under the new formula. By our count, that 90-day window runs to about 5 February 2027 (23 days left in November, 31 in December, 31 in January and 5 in February). Our calculation from the reported figures.

Short-term: Companies, brokers and individuals with cases before SEBI now apply under the new rules and can use the online facility. Those with pending applications under the 2018 rules must decide within 90 days whether to move to the new framework.

Long-term: A formula-based system should make settlement amounts more consistent from case to case, which may encourage more parties to settle and free SEBI's enforcement staff for serious cases. The leniency discount for whistleblowers and early cooperators could help SEBI uncover more market abuse.

Who is affected: Listed companies, their promoters and directors; stockbrokers, mutual funds and other market intermediaries; individual traders who receive show-cause notices; and investors, who benefit from faster, clearer enforcement.

Questions and Answers