The Securities and Exchange Board of India (SEBI) has rolled out a revamped settlement framework from November 7, 2026, introducing fresh requirements for individuals and organisations seeking to resolve certain administrative and civil regulatory proceedings without going through the full adjudication process. The updated regulations bring changes to application charges, minimum settlement payments and filing deadlines. They also establish dedicated faster-resolution routes for specific categories of violations and smaller settlement cases.
The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, were notified on October 8, replacing the previous framework introduced in 2018.
To make the revised process easier to navigate, the regulator has also launched an online application facility, a settlement amount calculator and a set of frequently asked questions (FAQs) on its official website.
For market participants facing regulatory action, understanding these provisions is important, particularly when deciding whether to apply for settlement, calculating the potential financial liability and meeting the prescribed deadlines.
SEBI Settlement Rules 2026: What Are the New Application Fees?
Under the revised framework, applicants must pay a non-refundable fee when submitting a settlement request.
The applicable charges have been fixed at:
Rs 25,000 for individuals or natural persons.
Rs 35,000 for other applicants, including entities.
These charges are separate from the actual settlement payment required to resolve the regulatory proceedings.
SEBI has also introduced minimum settlement thresholds depending on the applicant’s previous settlement history.
First-time applicants: Minimum settlement amount of Rs 3 lakh.
Other applicants: Minimum settlement amount of Rs 7 lakh.
The final amount will be determined through a prescribed calculation method rather than a uniform payment applicable to every case.
How Will SEBI Calculate The Settlement Amount?
The 2026 regulations introduce a structured formula under Regulation 10 to determine the amount payable by an applicant.
The calculation considers several elements, including the basic amount, the stage at which proceedings have reached, regulatory action already taken, the seriousness of the alleged violation and circumstances that could increase or reduce the applicant’s liability.
The prescribed formula is:
Settlement amount = Base amount × (Stage of proceeding + Regulatory action factor + Gravity factor + Aggravating factors – Mitigating factors).
The calculated amount cannot be lower than the applicable minimum threshold of Rs 3 lakh for first-time applicants or Rs 7 lakh for other applicants.
What Is the Deadline for Applying Under the New SEBI Framework?
The revised regulations generally provide applicants with 90 days to submit a settlement request after receiving a show-cause notice or supplementary show-cause notice.
A separate provision has been introduced for certain regulatory proceedings that were already pending before SEBI when the new rules came into effect on November 7, 2026.
Eligible applicants who have not previously submitted an application, or whose earlier applications were rejected, returned or withdrawn under the 2018 regulations, can seek settlement under the new framework.
They must submit their applications within 90 days from the commencement of the revised regulations, making February 4, 2027, the applicable deadline.
However, applicants using this transitional window will have to pay an additional amount. Their settlement liability will be 20 per cent higher than the figure calculated under the standard formula.
For matters pending before the Securities Appellate Tribunal (SAT) or the Supreme Court, settlement applications can also be submitted while the appeal remains under consideration.
SEBI Introduces A Settlement Route Before Show-Cause Notices
Another important change is the introduction of a settlement notice mechanism that allows eligible applicants to approach the regulator before a formal show-cause notice is issued.
Under this arrangement, applicants receive 60 days from the date of receiving the settlement notice to file their applications.
However, this option is subject to restrictions. It cannot be used in cases where SEBI is considering issuing interim directions or initiating prosecution.
Which Violations Qualify For Fast-Track Settlement?
The 2026 regulations establish two separate mechanisms to speed up the settlement of eligible cases.
1. Fast-track settlement for specified violations
This route covers certain procedural and compliance-related defaults, including delays in making mandatory disclosures and submitting prescribed returns, reports or documents.
Applicants generally have 30 days from receiving the relevant notice to seek settlement. SEBI may grant an additional 15 days where an extension is permitted.
2. Fast-track settlement based on the monetary threshold
The second mechanism applies to eligible cases where the settlement amount does not exceed Rs 10 lakh and the matter can be resolved without requiring disgorgement or additional remedial and regulatory conditions.
An important feature of this route is that applicants are not required to submit a separate request for fast-track treatment.
If the Internal Committee determines that an existing settlement application meets the prescribed eligibility conditions, it can be considered under this mechanism.
Such cases are placed directly before the Panel of Whole Time Members instead of being referred to the High Powered Advisory Committee.
Which Cases Are Not Eligible For Settlement?
Although the revised framework expands the settlement process, it does not make every regulatory violation eligible for resolution through payment.
Certain categories of applicants are specifically excluded. These include individuals or entities classified as wilful defaulters, fraudulent borrowers or fugitive economic offenders.
Settlement may also be restricted when an audit, investigation, inspection or examination relating to the same cause of action is already underway, subject to the exceptions provided under the regulations.
Cases involving serious market consequences also face additional restrictions. These include violations that have a market-wide impact, cause substantial losses to investors or threaten the integrity of the securities market.
Such matters may be considered only where the identified concerns can be adequately addressed through monetary payments and appropriate remedial or regulatory conditions.
SEBI also retains the authority to refuse applications where applicants do not meet the prescribed eligibility requirements or fail to comply with settlement conditions.
How To Apply Through SEBI’s Online Settlement Facility
To simplify access to the revised framework, SEBI has made an electronic settlement application facility available through its official website.
Applicants can also use the settlement amount calculator to obtain an estimate of their potential financial liability based on the new calculation methodology.
The regulator has additionally published FAQs covering important aspects of the process, including eligibility requirements, application procedures, payment calculations and filing timelines. An explanatory video has also been made available to help users understand how to operate the calculator.
Applications submitted through the online facility are subject to regulatory scrutiny. Depending on the nature of the case, they may be examined by an Internal Committee and, where applicable, the High Powered Advisory Committee before a decision is taken by the Panel of Whole Time Members.
Importantly, submitting a settlement application does not prevent SEBI from taking interim administrative or civil measures where necessary to safeguard investors and protect the integrity of the securities market.
