SEBI notifies new Settlement Regulations, 2026, replacing the 2018 regime for settling enforcement cases

SEBI has notified the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2026, published in the Gazette of India on 7 October 2026, replacing the SEBI (Settlement Proceedings) Regulations, 2018. The regulations let an entity facing a SEBI enforcement proceeding -- for violations under provisions such as Sections 11, 11B, 11D, 12(3) or 15-I of the SEBI Act, 1992, or parallel provisions of the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996 -- apply to settle the case by paying a settlement amount and accepting remedial terms, instead of contesting it through adjudication. An application must ordinarily be filed within 90 days of a Show Cause Notice, carries a non-refundable fee of Rs. 25,000 for individuals and Rs. 35,000 for other entities, and binds the applicant to facts already established against it in any other proceeding on the same cause of action.

Settlement is barred where the alleged default has a market-wide impact, has caused losses to a large number of investors, or has affected market integrity, and is barred altogether for wilful defaulters, fraudulent borrowers and fugitive economic offenders. Pending applications earlier rejected, returned or withdrawn under the 2018 regulations must be refiled within 90 days of commencement, but the settlement amount for such refiled applications is fixed 20% higher than it would otherwise be. The regulations take effect 31 days after notification, that is, from 7 November 2026.