SEBI Revamps Settlement Rules: 20% Extra Charge May Go, Fast-Track Route For Rs 10 Lakh Cases

The Securities and Exchange Board of India (SEBI) has proposed a new framework to replace the 2018 Settlement Proceedings Regulations, aiming to make enforcement settlements faster and more transparent. Key proposals include a fast-track mechanism for cases involving amounts up to Rs 10 lakh, allowing them to bypass the High Powered Advisory Committee and go directly to a panel of Whole Time Members. Additionally, SEBI intends to scrap the 20 per cent additional charge currently applied when multiple proceedings are settled simultaneously, potentially reducing the financial burden on applicants.

The proposed changes also include a revised formula for calculating settlement amounts, which would be linked to minimum prescribed penalties rather than wrongful gains or losses, which would be handled separately via disgorgement. To simplify calculations, SEBI suggests treating multiple disclosure failures stemming from a single event as a single default. The regulator also plans to expand the number of mitigating factors from three to five and adjust interest rates on disgorgement amounts.

Furthermore, SEBI is considering extending the 60-day deadline for filing settlement applications after receiving a show-cause notice to accommodate entities with complex or overseas operations. These proposals, based on stakeholder consultations and a review of recent settlement applications, aim to create a more predictable settlement process while maintaining its deterrent effect.

(Source：Times Now News)