Settlement petitions increased in SEBI; 703 applications were filed this financial year, 284 were settled

The settlement petitions filed with the market regulator SEBI have been rising substantially. SEBI has received 703 settlement applications for breach of securities regulations in the financial year 2024-25. This indicates that the trend of settling cases without having to go through lengthy litigation procedures is on a rise.

In FY 2023-24, SEBI received 434 settlement petitions. As per SEBI's 2024-25 Annual Report, of the 703 settlement applications received during FY25, the regulator settled 284 applications by passing suitable settlement orders, while the remaining 272 applications were returned, or rejected or withdrawn. Indeed, SEBI's settlement process provides for the institution to settle cases by paying a settlement fee and fulfilling some conditions, without becoming involved in protracted litigation.

It is worth noting that for the 284 applications settled, SEBI collected Rs 798 crore as settlement fee and about Rs 65 crore as recovery fee. These settlement orders were issued for alleged violations of various rules, including insider trading, fraudulent trade practices, alternative investment funds, mutual funds and foreign portfolio investors etc. Along with settlement cases, SEBI also disposed of several appeals. A total of 533 new regulatory-related appeals were filed in the Securities Appellate Tribunal (SAT) in 2024-25, as against 821 in the previous fiscal. The majority of the appeals disposed of, about 62 per cent, were related to violations of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.