SEBI's new settlement rules: Fast-track resolution now available for cases up to ₹10 lakh..

The Securities and Exchange Board of India (SEBI) has issued new, revised rules for calculating settlements. Additionally, it has introduced a fast-track route for cases involving amounts up to ₹10 lakh.

In a notification, the regulator stated that the revised formulas for settlements and the fast-track route aim to make the system simpler and more predictable.

Under the Settlement Regulations, 2026, settlement terms will encompass the settlement amount, the disgorgement of ill-gotten gains (where applicable), and remedial and regulatory conditions (previously referred to as non-monetary conditions).

A separate provision has been made for the disgorgement of ill-gotten gains to ensure that such amounts are not double-counted during the settlement calculation.

**Settlement amount to be linked to a base amount**
The new formula links the settlement amount to a 'base amount,' which is tied to the minimum penalty prescribed for violations under securities laws. Factors considered in determining the base amount include legal costs, the stage of proceedings, the nature of regulatory action, the severity of the violation, and any aggravating or mitigating factors.

The calculation of the base amount will exclude ill-gotten gains, avoided losses, or losses suffered by investors; instead, these amounts will be recovered separately.

Apart from monetary thresholds, the nature of the violation (such as certain disclosure-related breaches) will determine whether a case qualifies for the newly introduced fast-track settlement route.

According to reports, the regulator stated, "There will be two types of fast-track settlements: violation-based fast-track settlement and monetary threshold-based fast-track settlement."

**Who will handle investigations involving amounts of ₹10 lakh or more?**

When the settlement amount is ₹10 lakh or less, cases will be referred directly from the Internal Committee to a panel of Whole-Time Members. In the case of fast-track settlements based on violations, SEBI will issue a notice to the concerned entity, offering an opportunity to settle the matter by paying the amount specified in the notice.

Once the settlement amount is paid, the panel of members will issue the settlement order. These rules also cover the settlement of cases involving the misrepresentation of financial statements or the misuse of funds, provided that appropriate corrective and regulatory measures—including disclosures and the recovery of diverted funds—are undertaken.

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