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SEBI notifies Settlement Regulations, 2026 with a fast-track route

By CAShorts DeskPublished Updated Sources: DD News (IANS); SEBI notification of October 6, 2026 (Gazette of India, October 7); SEBI press release PR No. 59/2026

SEBI notifies Settlement Regulations, 2026 with a fast-track route
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The Securities and Exchange Board of India (SEBI) has notified the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2026, replacing its 2018 rules. They take effect on the day after the 30th day from Gazette publication on October 7, 2026. Settlement amounts follow a new formula, and cases of up to Rs 10 lakh get a fast-track route.

Syllabus: GS3 · Indian Economy & Growth; Prelims · Economy & Social Development; GS2 · Statutory & Regulatory Bodies

Why it matters

Take, as an illustration, a listed company that files a shareholding disclosure a few days late: such a lapse can lead to a formal SEBI proceeding with notices and hearings. Under the new regulations SEBI can send that company a notice naming an amount; if it applies and pays within 30 days, the matter ends with a settlement order. This should free SEBI's officers for serious cases such as fraud and insider trading. For investors, the gain is that money wrongly earned is now taken back separately and goes to the Investor Protection and Education Fund. The larger question is whether a regulator should let violators pay and close a case. A published formula answers part of it, because every applicant can see how the amount was reached.

Prelims pointers

  • SEBI: set up in 1988 as a non-statutory body; statutory regulator of the securities market since the Securities and Exchange Board of India Act, 1992.
  • Section 15JB of the SEBI Act, 1992: SEBI's power to settle administrative and civil proceedings. Similar powers exist in the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996.
  • Securities Appellate Tribunal: set up under Section 15K of the SEBI Act, 1992; hears appeals against SEBI's orders. Appeals from it lie to the Supreme Court.
  • Disgorgement: giving up wrongful gains made or losses averted. The disgorged money goes to the Investor Protection and Education Fund under the SEBI Act, 1992.
  • The settlement amount goes to the Consolidated Fund of India; the application fee and legal costs go to SEBI's General Fund.
  • High Powered Advisory Committee: a judicial member who was a Judge of the Supreme Court or a High Court, and three external experts.
  • Panel of Whole Time Members: two or more Whole Time Members of SEBI, constituted by the SEBI Chairman; it accepts or rejects every settlement.
  • Settlement covers civil and administrative proceedings, including appeals pending before the Securities Appellate Tribunal or the Supreme Court. Criminal offences under the SEBI Act, 1992 are compounded, not settled.

Practise a UPSC-style question

Consider the following statements about the Securities and Exchange Board of India (SEBI):

1. It was established as a statutory body by the Securities Contracts (Regulation) Act, 1956.

2. Appeals against its orders are heard by the Securities Appellate Tribunal.

Which of the statements given above is/are correct?

  1. (a) 1 only
  2. (b) 2 only
  3. (c) Both 1 and 2
  4. (d) Neither 1 nor 2
Show the answer

Answer: (b) 2 only

1 is incorrect: SEBI was set up in 1988 as a non-statutory body and became a statutory body under the Securities and Exchange Board of India Act, 1992, not the 1956 Act. 2 is correct: the Securities Appellate Tribunal, set up under the SEBI Act, 1992, hears appeals against SEBI's orders.

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