The Securities and Exchange Board of India (SEBI) has introduced a fresh set of rules aimed at making the regulatory framework for securities market violations simpler and more transparent. The changes cover how settlement amounts are calculated, how certain cases can be resolved faster and what companies may need to do to settle regulatory proceedings. The new framework also changes the treatment of wrongful gains and introduces separate routes for fast-track settlements.
The broader objective of the Settlement Regulations, 2026, is to simplify the settlement framework and reduce the scope for inconsistent or unpredictable outcomes.
Under the new framework, the settlement amount will be calculated using a base amount linked to the minimum penalty prescribed for the relevant violation under securities laws.
This base amount will then be adjusted according to several factors, including the stage of proceedings, regulatory action, the gravity of the violation, aggravating and mitigating circumstances, and legal costs.
The revised formula is intended to bring greater consistency to settlement calculations. By specifying the factors that influence the amount, SEBI aims to make the process easier to understand and more predictable for entities seeking to settle regulatory proceedings.