SEBI settlement regulations: pending applications and the 4 February 2027 deadline

SEBI’s Settlement of Administrative and Civil Proceedings Regulations, 2026 apply from 7 November 2026. The transition rules distinguish pending applications by the stage reached by the High Powered Advisory Committee and the Panel of Whole Time Member. A separate filing window ending on 4 February 2027 is available in the circumstances identified in SEBI’s FAQ.

Which regulations apply to a pending application?

Under regulation 44(i), the 2018 Regulations apply if the Panel of Whole Time Member accepted the committee’s recommendations before 7 November 2026. Under regulation 44(ii), if the recommendations were yet to be approved by the Panel on or before 6 November 2026, the applicant is to be given an option to continue under the 2018 Regulations or proceed afresh under the 2026 Regulations. That option must be exercised within 30 days of receipt of notice.

Under regulation 44(iii), the settlement is governed by the 2026 Regulations if the committee was yet to make any recommendation as on 7 November 2026. The relevant transition question is therefore not simply whether an application was pending on that date: the status of the committee’s recommendation and its acceptance or approval also matters.

Practitioners should check the application record against each part of regulation 44 and SEBI’s FAQ. In particular, was a recommendation made, and was it accepted by the Panel before 7 November? If an option notice has been received, when was it received and which route will the applicant choose?

Who has until 4 February 2027 to file?

SEBI’s FAQ says regulation 4(3) permits an application within 90 days from 7 November 2026, on or before 4 February 2027, in the cases it identifies. These include an applicant who has not filed a settlement application. They also include an applicant whose application under the 2018 Regulations was rejected, returned or withdrawn.

Check which provision addresses the applicant’s circumstances rather than treating the two periods as interchangeable. For an earlier application, practitioners should also check its recorded status and whether it was rejected, returned or withdrawn under the 2018 Regulations.

What happens to the underlying proceedings?

Under regulation 8(2), if an application is filed before a show cause notice is issued, issuance of the notice is kept in abeyance. Under regulation 8(1), if the application is filed after a show cause notice is issued, the specified proceeding continues except for the passing of the final order. Regulation 8(3) states that filing an application does not restrict SEBI from passing interim civil and administrative directions.

When advising on timing, check whether a show cause notice has already been issued and which rule in regulation 8 applies. Also distinguish the effect on a final order from the position concerning interim directions.

Check the relaxation provision and the FAQ

Regulation 42 provides for SEBI to relax timelines within 30 days from expiry of the deadline for performing an act, subject to stated exceptions. The exceptions include the timeline for filing an application after receipt of a show cause notice or supplementary show cause notice under regulation 4(1). They also include the timeline for filing an application after receipt of a notice prior to issuance of a show cause notice under regulation 5(1).

For any proposed reliance on relaxation, check the relevant deadline, the applicable provision and the exceptions in regulation 42. SEBI’s FAQ states that its explanations and clarifications should not be regarded as an interpretation of law or treated as binding SEBI opinion or guidance. Read the FAQ alongside the applicable regulatory provisions and the application record.

This article is general information, not legal advice.