Archive · 25 Sep 2026
SEBI Fast-Tracks Low-Value Settlements, Eases Rules for FPIs
India’s market regulator, SEBI, is changing how it settles some legal cases.
Cases involving less than Rs 10 lakh can now be handled through a faster process.
SEBI will calculate payments using a formula that considers the seriousness of the violation and other factors.
Wrongful gains will not be counted again in the basic penalty.
Companies and individuals will get 90 days to answer a show-cause notice.
Some entities can also apply to settle older cases during a special 90-day period.
They will have to pay 20% more than the normal settlement amount.
SEBI is also giving foreign investors access to more types of derivatives.
Those investors must leave certain commodity positions before delivery is required.
Cases involving settlement amounts below Rs 10 lakh can move directly from SEBI’s internal committee to a panel of whole-time members.
SEBI will use the SRGAM formula to calculate settlement amounts, adding legal costs and excluding wrongful gains from the base penalty.
Entities will have 90 days to respond to show-cause notices, compared with the previous 60-day period.
A one-time 90-day window will let eligible entities seek settlement in existing cases, subject to an additional 20% payment.
Foreign Portfolio Investors will gain access to specified non-agricultural index and commodity derivatives, with exit requirements before delivery obligations.
- Who
- The Securities and Exchange Board of India (SEBI), entities facing regulatory proceedings, and Foreign Portfolio Investors (FPIs).
- What
- SEBI revised its settlement framework, introduced a settlement calculation formula, extended response periods, and expanded certain FPI derivative participation.
- When
- Under the revised regulations; eligible entities will receive a one-time 90-day application window after implementation.
- Where
- India’s securities market and SEBI’s regulatory proceedings.
- Why
- To simplify and speed up the settlement process and clarify settlement calculations and eligibility.
- Fast-track threshold
- Settlement cases below Rs 10 lakh can bypass some internal steps and move directly to a panel of whole-time members.
- Settlement formula
- The SRGAM formula considers the stage of proceedings, regulatory action, gravity, aggravating factors, and mitigating factors.
- Legal costs
- Legal costs are added after calculating the settlement amount.
- Show-cause response period
- The response period increases from 60 days to 90 days.
- Pre-notice settlement
- Entities may apply for settlement within 60 days before a show-cause notice is issued.
- Existing-case window
- A one-time 90-day window will be available after implementation, with an additional 20% payment for eligible applicants.
- FPI derivatives
- FPIs may participate in specified non-agricultural index and non-cash-settled commodity derivative contracts, but must exit before delivery obligations arise.