SEBI settlement overhaul separates fund recovery from settlement payment
BusinessLine 1 hr ago·28 Sept 2026, 4:55 pm
The Securities and Exchange Board of India (SEBI) has introduced a significant procedural change in how it handles cases of market misconduct. The regulator now plans to separate the process of recovering diverted funds from the payment of settlement fees. Previously, these steps were often handled together, but the new framework will treat them distinctly to improve efficiency and clarity.
This shift is a major win for investors as it ensures that the primary goal of recovering illicit gains is prioritized. By keeping the recovery of funds separate from the settlement payment, SEBI aims to ensure that defrauded investors see their money returned more quickly. It also simplifies the process for entities accused of violations, making the settlement cycle more predictable and transparent.
Market participants should monitor how this new structure is implemented. A smoother settlement process could encourage more entities to settle disputes out of court, reducing the burden on the judicial system. Investors should also keep an eye on the timeline for these recoveries, as a faster return of funds directly benefits the retail investor base.
Excerpt from BusinessLine
The Securities and Exchange Board of India’s (SEBI) revised settlement framework will keep recovery of money allegedly diverted from a company separate from the amount paid to settle regulatory proceedings, lawyers said. The distinction could be important in fund-diversion and siphoning cases, where the return of…Read the original at BusinessLine
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