Chapter I | Preliminary
Q.1 What is the purpose of the 2026 Settlement Regulations?
These Regulations provide SEBI’s statutory process for settlement of specified administrative and civil proceedings. The Regulations set out who may submit an application, when it may be considered, how settlement terms are computed and approved, and the legal effect of the resulting order. The specified proceeding must fall within the definition in Regulation 2; settlement is subject to SEBI’s assessment of the case and the statutory restrictions.
Q.2 Do the Regulations apply only after SEBI issues an SCN?
No. The settlement framework is not limited to applications made after issuance of a show cause notice (SCN). Applications can be considered at a voluntary or pre-notice stage, after issuance of a show cause notice, and in certain appellate matters. The filing stage affects the stage factor in Regulation 12; where a matter is already under examination or investigation, Regulation 6 may restrict an ordinary settlement application.
Reference: Regulation. 2(1)(l), 3–5
Q.3 What is covered by the expression “securities laws”?
“Securities laws” has the meaning expressly assigned by Regulation 2(1)(i). It covers the SEBI Act, the Securities Contracts (Regulation) Act, the Depositories Act and other laws administered by SEBI to the relevant extent, together with the applicable rules, regulations, master circulars, circulars, orders and guidelines issued under them. The alleged act or omission must attract a “specified proceeding” within the meaning of Regulation 2.
Reference: Regulation2(1)(i)
Q.4 What does “stage of proceeding” mean?
“Stage of proceeding” is the stage at which the specified proceeding is pending on the filing date. Regulation 12 assigns different values depending on whether the matter is voluntary, pre-SCN, post-SCN or at an appellate stage; the most advanced applicable stage governs connected proceedings.
Reference: Regulation. 2(1)(m), 12
Q.5 Are time periods expressed in calendar days?
Yes. Regulation 2(1)(d) defines “days” as calendar days.
Reference: Regulation2(1)(d)
Chapter II | General: application and limitation
Q.6 Who can apply for settlement?
Under Regulation 3(1), any person or entity, including a company, promoter, director, KMP, intermediary or individual, may apply for settlement of a specified proceeding initiated or proposed to be initiated by SEBI for an alleged violation of securities laws.
However, Regulation 6 prescribes the following restrictions:
- Ineligible applicants: Wilful defaulters, fraudulent borrowers and fugitive economic offenders cannot settle proceedings.
- Pending investigations: Settlement applications are generally not considered while an examination, investigation, inspection or audit is pending, except for confidentiality applications.
- Previously rejected applications: A fresh application for the same alleged default is permitted only under the exceptions in Regulations 4(3) and 7(4).
- Serious violations: SEBI may decline settlement for violations affecting market integrity, causing widespread investor losses or having market-wide impact, subject to Regulation 18(2).
Thus, eligibility depends on the applicant’s status, nature of the proceeding and restrictions under Regulation 6. Even where an applicant is eligible, settlement is subject to the discretion of the Panel of Whole-Time Members under Regulation 6(3).
Reference: Regulation3(1)
Q.7 How is a settlement application filed?
The application must be filed in the prescribed Form (Part A of Schedule I), accompanied by the Undertaking and Waiver (Part B of Schedule I) and the basis of computation of the settlement amount (Part C of Schedule I).
The following requirements must be complied with:
1. Application fee: A non-refundable application fee of Rs. 25,000 for a natural person and Rs. 35,000 for other entities must be paid through the designated payment gateway.
2. Single application: The applicant must submit one consolidated application covering all specified proceedings arising from the same cause of action.
3. Authorization: Where the applicant is an entity other than a natural person, the application and undertaking and waiver must be executed by a duly authorized person responsible for the conduct of its business. Relevant board resolution should be in place to file settlement application.
4. Time limit: Under Regulation 4, an application relating to proceedings pending before SEBI must generally be filed within 90 days from service of the Show Cause Notice or supplementary Show Cause Notice, whichever is later. This limitation does not apply where the proceedings are pending before the Tribunal or Supreme Court. Where SEBI issues a settlement notice before Show Cause Notice under Regulation 5, the application must be filed within 60 days of receiving that notice.
5. Rectification of defects: If the application is incomplete, inaccurate or does not comply with the Regulations, SEBI may return it with reasons. The applicant may submit a complete and revised application within 15 days of SEBI’s communication, failing which the application will be deemed withdrawn.
Relevant provisions: Regulations 3, 4 and 5 read with Schedule I, Parts A, B and C, of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026 (Gazette pages 73–75).
Q.8 Does the applicant need to calculate the settlement amount?
Yes. As per Regulation 3(2) the applicant is required to submit the basis of computation of the proposed settlement amount in the prescribed format under Part C of Schedule I, along with the settlement application and undertaking and waiver. However, the amount calculated by the applicant is not necessarily the final settlement amount. The settlement amount is subject to SEBI’s assessment and determination in accordance with the Regulations.
The proposed settlement amount is to be calculated in accordance with the methodology prescribed under Regulation 10, read with Regulations 11 to 16, considering the applicable factors such as the nature of the alleged default, relevant amount and other applicable adjustments.
Reference: Regulation3(2); Schedule I, Part C
Q.9 Can separate applications be made for the same cause of action?
The applicant must submit one application in respect of all specified proceedings arising from the same cause of action. Regulation 3(5) requires one application covering all specified proceedings in respect of the same cause of action. This prevents fragmented applications for closely connected proceedings, though the settlement amount is computed separately for each applicant under Regulation 10(4).
Reference: Regulation3(5)
Q.10 What if an application is incomplete?
An application which is incomplete or does not satisfy the requirements may be returned with reasons. SEBI must communicate the reasons for returning an incomplete or non-conforming application. A compliant revised application must be submitted within 15 days of that communication; otherwise it is deemed withdrawn, so the applicant should consider the consequences of Regulation 7(5) before refiling.
Reference: Regulation. 3(6)–(7), 7(5)
Q.11 Who signs an application for a company or entity?
Where the applicant is a company or any other non-natural-person entity, the settlement application and the accompanying undertaking and waiver must be signed by a duly authorised person who is in charge of and responsible for the conduct of the business of such entity. The application shall bind the company.
Reference: Regulation3(8)
Q.12 What is the filing deadline after an SCN?
The ordinary post-SCN deadline is 90 days from service of the SCN or supplementary SCN, whichever is later. Regulation 4(1) is a limitation on consideration of late applications, and Regulation 42 relaxation is not applicable for 90-day period.
Reference: Regulation4(1)
Q.13 Does the 90-day limit apply to appeals?
No. Regulation 4(2) excludes eligible proceedings pending before SAT or the Supreme Court from Regulation 4(1). An application involving a pending SAT or Supreme Court appeal is not subject to the ordinary 90-day bar under Regulation 4(1).
Reference: Regulation4(2)
Q.14 What is the pre-SCN settlement notice mechanism?
Regulation 5 provides for a settlement notice before an SCN and a 60-day period from its receipt. The notice is intended to communicate the substance of probable charges and contemplated enforcement action so the recipient can decide whether to apply before the SCN stage. The 60-day clock runs from receipt of the settlement notice; within which period application must be filed.
Reference: Regulation5(1)
Regulation 5 expressly excludes some categories of cases from the ordinary pre-SCN settlement notice requirement. Regulation 5(2) provides exceptions for contemplated interim directions, prosecution and cases under Regulation 27. Regulation 5(3) also preserves right to modify nature of enforcement action to be initiated or probable charges stated in the notice. Such notice shall not confer right to seek settlement.
Reference: Regulation5(2)–(3)
Chapter III | Scope, rejection and withdrawal
Q.15 Who is eligible for settlement under the 2026 framework?
Any entity against whom specified proceedings have been initiated or may be initiated is eligible to file an application proposing settlement, subject to compliance with the requirements of the Regulations.
Accordingly, individuals, companies, intermediaries and other entities may apply for settlement at any stage of the proceedings, provided the matter is eligible for settlement under the Regulations.
Regulation 6(1)(iii) excludes wilful defaulters, fraudulent borrowers and fugitive economic offenders. The defined terms for wilful defaulter/fraudulent borrower and fugitive economic offender refer to the external legal classifications identified in the explanation to Regulation 6.
Reference: Regulation6(1)(iii)
Q.16 Can an application be considered while SEBI’s investigation is pending?
Regulation 6(1)(ii) bars settlement while the relevant examination, investigation, inspection or audit is pending, except for the confidentiality route. The confidentiality route is specifically carved out of the pending-examination/investigation bar.
Reference: Regulation6(1)(ii)
Q.17 Can serious market-wide violations be settled?
As per Regulation 6(2), specified proceedings may not be settled where the alleged default:
- Has a market-wide impact;
- Has caused losses to a large number of investors; or
- Has affected the integrity of the market.
However, Regulation 18(2) provides an exception. Where the impact of the violation on investors or market integrity can be adequately remedied through monetary settlement and appropriate remedial and regulatory terms, SEBI may consider settlement of such violations.
Further, Regulation 6(3) preserves the discretion of the Panel of Whole Time Members to accept or reject a settlement application in the interest of investors or the development of the securities market.
Reference: Regulation. 6, 18(2)
Q.18 Can a settlement application be rejected??
A settlement application may be rejected or returned on various grounds, including:
- Ineligible proceedings: Where the alleged default is not eligible for settlement under Regulation 6.
- Non-compliance with requirements: Where the application is incomplete, inaccurate or does not comply with the prescribed requirements. Under Regulation 3(6), SEBI may return such an application, and failure to submit a revised application within 15 days results in deemed withdrawal.
- Non-cooperation: Where the applicant fails to cooperate with SEBI or comply with the settlement process.
- Failure to comply with settlement terms: Where the applicant fails to fulfil the settlement conditions, including payment of the settlement amount within the prescribed time.
- Public interest considerations: Where SEBI considers settlement inappropriate in view of the nature, gravity or market impact of the alleged violation.
Further, Regulation 6(3) empowers the Panel of Whole Time Members to accept or reject any settlement application in the interest of investors or the development of the securities market.
Reference: Regulation3(6), 3(7), 6, 7
Q.19 Can a rejected application be filed again?
Yes. As per Regulation 7(4), a rejected settlement application may be filed again, subject to the following conditions:
- Subsequent stage: The application can be refiled only when the proceedings have progressed to a subsequent stage specified under Regulation 12(1). For example, if an application filed before issuance of a Show Cause Notice (SCN) is rejected, it may be refiled after issuance of the SCN.
- Reason for rejection: The reason for the earlier rejection must no longer exist.
- Additional settlement amount: The applicant must pay an additional 20% of the settlement amount otherwise payable.
Thus, a rejected application may be refiled only at a subsequent stage after the reason for rejection ceases, with 20% additional amount. The new application must be at a subsequent “stage of proceeding” within Regulation 2(1)(m), and the original cause of rejection must have ceased to exist. The extra 20% is calculated over the applicable settlement amount; the transitional opportunity under Regulation 4(3) is a separate route with separate conditions.
Reference: Regulation. 7(4), 4(3)–(4)
Q.20 Can a withdrawn application be filed again?
A withdrawn settlement application may be refiled at the same or a subsequent stage of proceedings, subject to payment of an additional 20% settlement amount under Regulation 7(5). An applicant may withdraw the application at any time before communication of the Panel of Whole Time Members’ decision accepting or rejecting it, as provided under Regulation 7(3). Further, under Regulation 7(6), withdrawal does not affect the continued validity of the undertakings and waivers relating to limitation or laches furnished by the applicant.
Reference: Regulation7(5)
Q.21 Does filing for settlement stop SEBI proceedings?
As per Regulation 8 of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026:
- Application filed after issuance of Show Cause Notice (SCN): Proceedings may continue, but passing of the final order shall be kept in abeyance until the settlement application is disposed of or withdrawn.
- Application filed before issuance of SCN: Issuance of the SCN shall be kept in abeyance until the settlement application is disposed of or withdrawn.
- Interim directions: SEBI retains the power to issue interim civil and administrative directions to protect investors’ interests and maintain market integrity.
- Multiple entities involved: Filing of a settlement application by one entity does not affect proceedings against other entities that have not applied for settlement.
Reference: Regulation8
Chapter IV | Settlement terms and amount
Q.22 What can settlement terms include?
Settlement terms may include the following, as applicable:
- Settlement amount: Payment of the settlement amount calculated in accordance with Regulation 10.
- Disgorgement and compensation: Disgorgement of wrongful gains made or losses avoided, or compensation for losses caused to investors, as alleged in the Show Cause Notice or determined in the order.
- Remedial and regulatory measures: Measures prescribed under Regulation 17, such as strengthening internal compliance systems, enhanced disclosures, suspension or cessation of business activities, exit from management, refund of money, restrictions on accessing the securities market, or voluntary debarment.
- Joint and several liability: In cases involving joint and several liability, applicants seeking settlement may be required to pay the disgorgement amount or investor compensation, along with interest, jointly or individually, as applicable.
Reference: Regulation9
Q.23 What does “Settlement Amount” mean?
Settlement amount refers to the monetary amount payable by an applicant to settle specified proceedings initiated or proposed to be initiated by SEBI for an alleged violation of securities laws.
In simple terms, it is the amount paid to SEBI to resolve regulatory proceedings without going through the entire adjudication or enforcement process.
How is the settlement amount calculated?
As per Regulation 10(1), the settlement amount is calculated using the following formula:
Where:
| Factor | Meaning |
| BA | Base Amount (Regulation 11) |
| S | Stage of Proceedings Factor (Regulation 12) |
| R | Regulatory Action Factor (Regulation 13) |
| G | Gravity Factor (Regulation 14) |
| A | Aggravating Factors (Regulation 15) |
| M | Mitigating Factors (Regulation 16) |
Under Regulation 10(2), if the combined factor is less than 1, it is taken as 1.
Reference: Regulation10(1)–(2)
Q.24 How is the base amount determined?
The base amount is ordinarily derived from the relevant statutory minimum penalty and the prescribed applicant-category multiplier. Regulation 11(1) starts with the applicable statutory minimum penalty multiplied by the applicant-category multiplier. Regulation 11 then addresses overlapping violations, several counts, penalties already imposed, appellate cases and specified situations counted as a single default.
Reference: Regulation11
Q.25 How do prior warnings or orders affect settlement?
The regulatory action factor is 0.10 per administrative warning, 0.20 per settlement order and 0.30 per adverse order. Regulation 13 separately counts specified prior regulatory actions, including qualifying orders whose operation has been stayed. Applicants should review the complete history of administrative warnings, settlement orders and adverse orders before computing R; each qualifying order can affect the calculation.
Reference: Regulation13
Q.26 What is the gravity factor?
Regulation 14 contains separate gravity values for prescribed violation categories, as well as the specified factor for settlement without admitting the violation. The specified gravity factors apply in addition to the prescribed reputation-related factor for applications made without admitting the violation. The correct Gravity factor [G] depends on the charges, so applicants should match each allegation carefully to the listed violation category rather than apply every factor automatically.
Reference: Regulation14
Q.27 What are aggravating and mitigating factors?
Aggravating and mitigating factors are prescribed additions and reductions to the settlement factor. Aggravating circumstances increase the relevant part of the formula, while mitigating circumstances reduce it, subject to the limits and conditions in Regulations 15 and 16. The application should explain the evidence supporting any mitigation claim rather than simply asserting that the conduct was inadvertent.
Reference: Regulation. 15–16
Q.28 Are there minimum settlement amounts?
Yes. The minimum is Rs. 3 lakh for a first-time applicant and Rs. 7 lakh for other applicants. The first-time test is conjunctive: the applicant must have no prior adverse order and must never have obtained a settlement order as of the present application date.
Reference: Regulation10(3)
Q.29 Can settlement amounts be calculated separately for a company and its directors?
Yes. The settlement amount must be calculated separately for each applicant, although payment may be individual or joint. For a single enforcement matter naming the company, promoter and individual directors, the relevant category multiplier and other factors are determined for each applicant.
Reference: Regulation10(4)
Q.30 How is the amount calculated when an order is under appeal?
Where a SEBI order is challenged before the Securities Appellate Tribunal (SAT) or the Supreme Court, the Base Amount for settlement is calculated based on the violations upheld in the order under challenge, rather than all the violations originally alleged.
However, where SAT has granted relief by setting aside certain violations and SEBI has appealed against such relief before the Supreme Court, 50% of the Base Amount attributable to each violation not upheld by SAT must also be considered in the calculation.
For example, if SEBI upheld three violations and SAT subsequently set aside two of them, the Base Amount would ordinarily be calculated for the one violation upheld by SAT. However, if SEBI challenges SAT’s relief before the Supreme Court, 50% of the Base Amount for each of the two violations set aside by SAT would also be included.
This determines the Base Amount, which is then used to calculate the settlement amount under the applicable provisions of the Regulations. It does not mean that the final settlement amount is necessarily equal to the Base Amount.
Reference: Regulation11(5)–(6)
Q.31 Can the WTM Panel depart from the formula?
Yes, but only in the exceptional circumstances described in Regulation 10(7). Regulation 10(7) is an exception for cases where the prescribed calculation cannot be used because of the peculiar default or particular circumstances.
Reference: Regulation10(7)
Q.32 Can SEBI impose additional compliance or corrective measures as part of the settlement terms?
Apart from payment of the settlement amount, SEBI may impose remedial and regulatory measures depending on the nature and gravity of the violation. These may include strengthening internal controls, appointing independent consultants, enhanced audits, refunds, restrictions on management roles or voluntary market debarment.
Where violations affect audited financial statements, SEBI may require appropriate stock exchange disclosures and explanatory notes in financial statements. In cases involving diversion or siphoning of funds, the applicant may be required to return the diverted funds along with interest.
The measures are determined considering factors such as the applicant’s conduct, investor losses, market impact and steps already taken to prevent recurrence. The applicant must comply with the prescribed conditions within the stipulated timelines.
Reference: Regulation. 17–18
Q.33 When is interest payable on amounts arising from violations in settlement proceedings?
Where an applicant is liable to pay any amount, including disgorgement of wrongful gains, losses avoided or losses caused to investors, interest is payable as follows:
- Where no final order has been passed: Interest at 9% per annum from the date of the transaction or violation until the date of filing the settlement application.
- Where a final order has been passed: Interest at 9% per annum from the date of the transaction or violation until the final order, and at 12% per annum thereafter until the date of filing the settlement application.
Interest is calculated only on the principal amount payable, without charging interest on unpaid interest.
Reference: Regulation 20
Q.34 What is the time limit for passing a settlement order?
As per Regulation 34(2) the Panel of Whole Time Members shall dispose of specified proceedings by passing a settlement order in a suo motu manner, where the application is filed pursuant to a settlement notice issued under Regulation 5 or a notice issued under Regulation 27, in accordance with the settlement terms approved by the Panel.
However, the Regulations do not prescribe a specific time limit for passing a settlement order after filing of the application or approval of the settlement terms.
Chapter V | Committees and approval
Q.35 How much time is allowed for revised settlement terms?
The applicant may submit revised settlement terms within the period prescribed under Regulation 22(5)(e), up to 21 calendar days. This is the prescribed period to submit revised terms within the applicable Internal Committee process, not an additional general deadline for initially applying under Regulations 4 or 5. Missing a procedural deadline can affect the application, subject to any permissible relaxation under Regulation 42.
Reference: Regulation 22(5)(e)
Q.36 Does HPAC make the final decision?
No. HPAC’s role is recommendatory; the WTM Panel decides in accordance with Regulation 25. HPAC examines the IC recommendation and may recommend acceptance, modification or rejection as prescribed. The WTM Panel retains the power to make the determination under Regulation 25.
Reference: Regulation. 23–25
Q.37 When is the settlement amount paid?
Once the Panel of Whole Time Member approves the settlement, SEBI issues a demand notice within 10 days of such approval. The applicant must pay the settlement amount within 30 calendar days from receipt of the demand notice, only through the dedicated payment gateway provided by SEBI.
The applicant must also comply with any other settlement conditions or submit the required undertakings within the prescribed timelines.
Failure to pay within the stipulated period may result in rejection of the settlement application. However, under Regulation 42, an extension of up to 30 days may be granted, subject to an increase of 1% in the settlement amount.
Reference: Regulation 25
Q.38 Can the timeline for payment of the settlement amount be extended?
Yes. As per Regulation 42(3) of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, the Panel of Whole Time Members may grant an extension of up to 30 days for payment of the settlement amount, subject to an additional charge of 1% of the settlement amount.
The extension must be provided for in the notice of demand, and the extended period cannot exceed 30 days.
Thus, the payment timeline may be extended, but such extension is discretionary and subject to the additional payment requirement.
Reference: Regulation 42(3)
Q.39 Can a settlement application be rejected if the settlement amount is not paid?
Yes. As per Regulation 7(1)(e) of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, a settlement application may be rejected if the applicant fails to remit the settlement amount within the prescribed period.
However, under Regulation 42(3), the Panel of Whole Time Members may grant an extension of up to 30 days for payment, subject to an additional charge of 1% of the settlement amount.
Thus, failure to pay the settlement amount within the prescribed or extended timeline may result in rejection of the application, and SEBI may continue the enforcement proceedings.
Reference: Regulations 7(1)(e), 7(6) and 42(3)
Chapter VI | Fast-track settlement
Q.40 What are the two fast-track routes?
As per Regulation 26(2) of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, fast-track settlement is classified into two routes:
1. Violation-based fast-track settlement (Regulation 27): SEBI may issue a fast-track settlement notice before initiating proceedings for specified violations, such as delayed disclosures, non-filing of returns, non-compliance with prescribed disclosure formats and delayed compliance with regulatory requirements.
2. Monetary threshold-based fast-track settlement (Regulation 28): Where the Internal Committee determines that the settlement amount calculated under the Regulations is up to Rs. 1 lakh, and no disgorgement or remedial and regulatory terms are applicable, the applicant may be offered settlement through the fast-track mechanism.
Thus, the first route is based on the nature of the violation, while the second is based on the settlement amount and absence of additional settlement obligations.
Reference: Regulation 26–28
Q.41 What types of violations may be covered by Regulation 27 fast-track settlement?
As per Regulation 27(1) of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, SEBI may offer violation-based fast-track settlement for the following defaults:
- Delayed disclosures, including filing of returns, reports, documents, etc.
- Non-disclosure by companies exclusively listed on regional stock exchanges that have exited.
- Disclosures not made in the prescribed formats.
- Delayed compliance with requirements of securities laws or directions issued by SEBI.
- Such other defaults as may be determined by SEBI.
Under this mechanism, SEBI may issue a fast-track settlement notice before initiating specified proceedings. However, issuance of such notice is discretionary, and SEBI may withhold it where the entity has failed to make full and true disclosure of facts or cooperate as required.
Reference: Regulation 27
Q.42 Is HPAC review required in fast-track settlement cases?
No. As per Regulation 26(3) of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, the provisions relating to the Internal Committee and the High Powered Advisory Committee (HPAC) under Regulations 23 and 24 do not apply to fast-track settlement proceedings.
Accordingly, HPAC review is not required for either violation-based fast-track settlement under Regulation 27 or monetary threshold-based fast-track settlement under Regulation 28.
However, under Regulation 28, the Internal Committee has a limited role in identifying cases eligible for monetary threshold-based fast-track settlement.
Reference: Regulation26(3); Regulation. 27–28
Q.43 What if an applicant does not complete fast-track settlement?
As per Regulation 29 of the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, where an applicant fails to complete the fast-track settlement process by:
- Not filing the settlement application under Regulation 27;
- Not paying the settlement amount within the time specified in the fast-track settlement notice; or
- Not paying the settlement amount or submitting revised settlement terms as required under Regulation 28;
SEBI may initiate or continue the specified proceedings against the applicant.
Further, the applicant shall be permitted to file a settlement application only at a subsequent stage of the proceedings, as specified under Regulation 12(1).
Reference: Regulation 29
Chapter VII | Settlement with confidentiality
Q.44 What is settlement with confidentiality?
It is a special mechanism in which the applicant seeks settlement by giving substantial assistance to SEBI. This is a cooperation-based settlement mechanism, not an ordinary route for paying to close an default.
Settlement with confidentiality is a mechanism under which SEBI may grant confidentiality benefits to a person who provides substantial assistance in an examination, investigation, inspection or audit concerning violations of securities laws by another person.
In return, the applicant may be permitted to settle specified proceedings by admitting the default for the limited purpose of settlement.
To avail this benefit, the applicant must:
- Make complete and truthful disclosure of relevant information, documents and evidence.
- Cooperate fully and continuously with SEBI.
- Cease participation in the securities law violation upon disclosure, unless otherwise directed by SEBI.
- Not conceal, destroy or manipulate relevant evidence.
Under Regulation 33, the applicant’s identity and information furnished are treated as confidential, subject to specified exceptions, including disclosures required by law.
An application under this Chapter shall be made only in cases prior to or pending an examination, investigation, inspection, or audit. Grant of confidentiality is discretionary and subject to SEBI’s satisfaction.
Reference: Regulation 30–33
Chapter VIII | Settlement orders
Q.45 Can a settlement order be revoked?
Yes. SEBI may revoke a settlement order on the following grounds:
- Non-compliance: The applicant fails to comply with any term of the settlement order.
- Incomplete or false disclosure: SEBI subsequently discovers that the applicant did not make full and true disclosure.
- Violation of undertakings or waivers: The applicant breaches any undertaking or waiver furnished during the settlement process.
Before revoking the settlement order, SEBI must provide the applicant an opportunity of hearing, as required under Regulation 39(2).
Upon revocation, SEBI may restore or initiate proceedings relating to the settled matter. Further, any amount already paid under the settlement shall not be refunded, as provided under Regulation 39(3).
Reference: Regulation39
Q.46 What is the consequence of revocation?
Where a settlement order is revoked:
- Restoration or initiation of proceedings: SEBI may restore or initiate proceedings against the applicant in respect of the matter covered by the revoked settlement order.
- No refund of settlement amount: Any amount already paid by the applicant under the settlement shall not be refunded, as expressly provided under Regulation 39(3).
- Loss of settlement protection: The applicant can no longer rely on the revoked settlement order to claim that the specified proceedings have been conclusively settled.
Further, under Regulation 40(3), the protection against using settlement proposals or representations as evidence under Regulation 40(2) ceases to apply where the settlement order is revoked.
Thus, revocation removes the protection arising from settlement, exposes the applicant to renewed enforcement proceedings and results in forfeiture of the amount already paid.
Reference: Regulation39
Q.47 Can a settlement application be refiled after revocation of the settlement order?
The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026 do not expressly provide for refiling a settlement application after revocation of a settlement order.
Regulation 39(1) provides that upon revocation, SEBI may restore or initiate proceedings relating to the settled matter. However, unlike Regulation 7(4) and 7(5), which expressly permit refiling of rejected or withdrawn applications, Regulation 39 contains no corresponding provision for refiling after revocation.
Therefore, there is no express right to refile a settlement application after revocation.
Chapter IX | Miscellaneous [Transition provisions]
Q.48 Is there a new power to relax procedural timelines?
Yes. The WTM Panel may relax certain procedural timelines under Regulation 42. Both conditions in Regulation 42(1) matter: the missed deadline must not be more than 30 days old, and failure must result from circumstances beyond the applicant’s control. The Panel may impose conditions, and the rule does not create an automatic extension.
Reference: Regulation42(1)
Q.49 Can the 60-day pre-SCN and 90-day post-SCN deadlines be relaxed?
No. Regulation 42(2) expressly excludes these filing limits. These two initial filing periods are expressly carved out by Regulation 42(2).
Reference: Regulation42(2)
Q.50 Is there a one-time application opportunity for pending proceedings?
Yes. As per Regulation 4(3), entities against whom specified proceedings were pending as on the commencement date of the Regulations are eligible to avail the one-time settlement opportunity, if settlement application was previously not filed or if filed earlier application was rejected, returned or withdrawn under the 2018 Regulations.
Such application must be filed within 90 days from commencement of the Regulations, and the settlement amount shall be 20% higher than the amount calculated under Regulation 10, as provided under Regulation 4(4).
Example: ABC Ltd. received a show-cause notice from SEBI in 2025 for alleged non-compliance with securities laws. The company had filed a settlement application under the 2018 Regulations, but it was rejected. If the proceedings were still pending when the 2026 Regulations came into force, ABC Ltd. may avail itself of the one-time opportunity by filing a fresh settlement application within the prescribed 90-day period.
If the settlement amount calculated under Regulation 10 is Rs. 10 lakh, the amount payable under this special opportunity would be Rs. 12 lakh, reflecting the additional 20%, subject to other applicable settlement terms.
Reference: Regulation4(3)–(4)
Q.51 What happens if the WTM Panel had already approved terms before commencement?
Approved terms continue to govern that pending application under Regulation 44(i). Regulation 44(i) preserves the already approved terms even if payment or final administrative steps remain pending. The applicant should follow the approved terms and relevant communication rather than independently recalculating the amount under the new formula.
Reference: Regulation44(i)
Q.52 What happens if the Panel of Whole Time Members had already approved the settlement terms before commencement of the 2026 Regulations?
Where the Panel of Whole Time Members (WTM Panel) had already approved the settlement terms under the 2018 Regulations, the application shall continue to be processed as per those approved terms, even if payment or issuance of the final settlement order is pending.
Example: ABC Ltd. filed a settlement application under the 2018 Regulations, and the WTM Panel approved a settlement amount of Rs. 15 lakh on 1 November 2026. However, the company had not paid the amount before the commencement of the 2026 Regulations. In such a case, ABC Ltd. would continue with the already approved settlement amount of Rs. 15 lakh, without recalculation under the 2026 Regulations.
Reference: Regulation 44(i).
Q.53 What happens if the HPAC had recommended settlement terms but the WTM Panel had not approved them?
Where the High Powered Advisory Committee (HPAC) had recommended settlement terms under the 2018 Regulations but approval of the WTM Panel was pending, the applicant has two options:
Continue processing the application with the settlement amount recommended by HPAC under the 2018 Regulations; or
Opt for fresh processing of the application under the 2026 Regulations.
The applicant must exercise either option within 30 days from receipt of SEBI’s notice.
Example: XYZ Ltd. filed a settlement application under the 2018 Regulations, and HPAC recommended a settlement amount of Rs. 20 lakh on 2 November 2026. However, the WTM Panel had not approved the recommendation when the 2026 Regulations commenced. XYZ Ltd. may either continue with the HPAC-recommended amount of Rs. 20 lakh or opt for fresh processing under the 2026 Regulations, where the settlement amount would be determined afresh. The company must communicate its choice within 30 days of receiving SEBI’s notice.
Reference: Regulation 44(ii).
Q.54 What happens if HPAC had not recommended settlement terms before commencement of the 2026 Regulations?
Where a settlement application was pending under the 2018 Regulations and HPAC had not made any recommendation before commencement of the 2026 Regulations, the application shall be processed under the 2026 Regulations, including a fresh meeting of the Internal Committee.
Example: PQR Ltd. filed a settlement application under the 2018 Regulations in September 2026. Although the application was under consideration, HPAC had not recommended any settlement terms by the commencement of the 2026 Regulations. In such a case, the application would be processed under the 2026 framework through a fresh Internal Committee meeting, and the settlement terms would be determined in accordance with the new Regulations.
Reference: Regulation 44(iii).
The article is written by Ms. Radhika Varade