Securities and Exchange Board of India has replaced its 2018 settlement rules with a modern framework designed to bring clarity and efficiency. The new formula links settlement amounts to the minimum statutory penalty and adjusts them based on seriousness of violation, stage of proceedings, regulatory action, and legal costs. This ensures consistency and predictability across cases.
Wrongful gains, losses avoided, and investor losses are now excluded from the base settlement amount. These will be disgorged separately, preventing double counting and ensuring fair recovery. Settlement terms will include three components: the settlement amount, disgorgement, and remedial and regulatory measures. The earlier concept of non monetary terms has been replaced with corrective actions that ensure violations are addressed.
Two fast track routes have been introduced. Cases with settlement amounts up to ₹10 lakh can be approved quickly by SEBI’s whole time members. Certain disclosure related or specified violations can also be settled faster with notified payments. Even serious violations such as misrepresentation of financial statements or diversion of funds can be settled, but only with corrective measures like disclosures or fund restoration.
