India's markets regulator on Friday proposed revamping its framework for settling cases in which market participants may have violated securities laws to simplify the process, reduce litigation and encourage quicker resolution of enforcement cases. Here are more details:
* The proposal replaces the existing settlement formula with a simplified calculation linked to statutory minimum penalties and factors such as the stage of proceedings, prior regulatory action, gravity of violations, and aggravating and mitigating circumstances.
* The regulator said that, with these tweaks, the average settlement amount for an infraction would be about four times the regulatory penalty, compared with eight times at present.
* SEBI proposes allowing rejected settlement applicants to reapply at later stages of proceedings, including before a securities tribunal or the Supreme Court, subject to a 20% additional settlement amount if the reasons for the earlier rejection no longer exist.
* The regulator has proposed limiting non-monetary settlement terms in adjudication cases, while retaining measures such as voluntary debarment or suspension in serious cases and for repeat offenders.
* In cases involving financial misstatements or diversion of funds, applicants may be required to disclose the allegations to investors as well as stock exchanges and to restore diverted funds with interest as part of settlement terms.
* The draft framework introduces a fast-track settlement route for specified violations and cases involving settlement amounts of up to 1 million rupees ($10,479.43), while reducing charges for refiled applications.
* Public comments on the proposals have been invited until September 4, 2026.
