Confidentiality granted by the Board permits a priority-based reduction in the settlement amount. Persons marked first in priority may receive up to ninety percent reduction, second-priority persons may receive up to fifty percent, and third or subsequent priority persons may receive up to twenty-five percent. The reduction applies up to the prescribed ceiling for the relevant priority category in administrative and civil settlement proceedings.

Remedial and Regulatory Terms may be determined by considering the applicant's conduct, role in group defaults, gravity and market impact, investor harm or gains, prior proceedings, corrective measures, compliance schedule, economic benefit, deterrence, and satisfaction of investor claims. Settlement may be considered where market-wide impact, market integrity concerns, or investor harm can be adequately remedied through monetary measures and such terms. Allegations may be modified if the facts disclose a different default, and alleged defaults may be categorised according to the facts and circumstances.

Settlement remedial and regulatory terms may include enhanced compliance controls, independent review, training, audit and reporting requirements, business restrictions, management exit, clawback, refunds, securities cancellation or lock-in, and market-access restrictions. Specified proceedings may require stock-exchange and financial-statement disclosures where alleged violations affect audited accounts. Alleged diversion or siphoning of funds requires restoration to the company with interest, while related trading gains or losses averted may inform settlement terms. Relevant disclosures may be made without admission or denial of findings.

Regulation 16 provides a mitigating-factor framework for settlement terms, allowing applicable factors a base value of 0.20 each, subject to a maximum of five factors. Mitigation includes impaired capacity for investor restitution, minimal participation, exceptional cooperation, voluntary acceptance of responsibility, corrective measures, limited reporting delays without undue gain or loss, compensation and disgorgement, specified disclosure circumstances, financial distress, changes in management or control, and non-benefiting independent directors.

Settlement amount calculation applies aggravating factors at a base value of 0.20 for each applicable factor, subject to a maximum of five factors. Factors include obstruction of examinations or proceedings, misleading or withheld information, prolonged misconduct, significant client loss, disregard of prior guidance, sophisticated planning, market infrastructure or liquidity jeopardy, abuse of trust or special skill, key-operator status, financial benefit, repetitive default, and reckless compliance failures. Search and seizure and other appropriate case-specific circumstances may also be considered.

Regulation 14 prescribes gravity factors for settlement applications in administrative and civil securities proceedings. A reputation-risk factor of 0.25 applies to applications made without admission of securities-law violations. Additional factors apply for failure to make an open offer, offer-document violations without fraudulent-trade-practice allegations, insider-trading violations, and fraudulent and unfair trade practice violations. Applicable additional factors are added to the reputation-risk factor.

Regulatory action factor (R) equals the aggregate of values assigned to administrative warnings and orders issued against an applicant. It assigns zero where no prior order exists, 0.10 for each administrative warning, 0.20 for each settlement order, and 0.30 for each adverse order. Orders stayed by a tribunal or court remain included in calculating R.

Stage of proceeding factor (S) is assigned according to the procedural stage of an enforcement proceeding when a settlement application is filed. The value increases from voluntary suo motu applications, through pre- and post-show cause notice stages, to matters pending before a Designated Member, the Board, the Tribunal, or the Supreme Court. For multiple enforcement proceedings arising from the same cause of action, the factor for the most advanced proceeding applies.

Base Amount for settlement is determined by applying the minimum statutory penalty for the relevant default and the applicable applicant-category multiplier. It is calculated for each count of default and aggregated, with the highest amount used where one default triggers multiple violations and separate amounts added for distinct defaults. The amount is doubled for a lead conspirator, and an independent director may be treated as an executive director where alleged or found to have benefited from or actively participated in fraud. The Base Amount cannot be below an imposed penalty.

Settlement amount is calculated by multiplying the base amount by combined factors relating to the proceeding stage, regulatory action, gravity, aggravating circumstances and mitigating circumstances, subject to a minimum factor of one. Minimum amounts differ between first-time applicants and other applicants. Each applicant's amount is separately calculated and may include legal costs. An additional amount applies to specified related proceedings arising from the same cause of action, while the Panel of Whole Time Member may determine the amount where the formula cannot be applied.

Settlement terms may include a settlement amount, disgorgement of wrongful gains or losses, and remedial and regulatory terms, except where proceedings concern only penalties. Applicants subject to joint and several liability may be required to pay disgorgement and interest jointly or severally, while applicable disclosures form part of every settlement term. Settlement amounts are credited to the Consolidated Fund of India; application fees and legal costs go to the General Fund, and disgorged amounts with interest go to the Investor Protection and Education Fund.

Settlement applications filed after a show cause notice permit the specified proceeding to continue while the final order remains in abeyance until disposal or withdrawal. Applications filed before a show cause notice keep its issuance in abeyance. The Board retains power to issue interim civil and administrative directions for investor protection and market integrity. Applications by some entities do not affect enforcement proceedings against non-applicants, and adverse observations against an applicant remain subject to its settlement outcome.

Settlement applications may be rejected for non-response, delayed or incomplete submissions, repeated non-appearance, breach of undertakings or waivers, non-payment, or failure to meet settlement conditions. Withdrawal is permitted before communication of the Panel's decision. Refiling after rejection is allowed only at a subsequent stage if the earlier ground no longer applies, while withdrawn applications may be refiled at the same or a subsequent stage, subject to an additional settlement amount. Undertakings and waivers concerning limitation and laches remain valid.

Settlement proceedings are unavailable for previously rejected applications concerning the same alleged default, pending examinations or investigations except confidentiality applications, and applicants classified as wilful defaulters, fraudulent borrowers or fugitive economic offenders. Settlement may also be declined for defaults with market-wide impact, widespread investor losses or effects on market integrity. The Panel of Whole Time Members retains discretion to accept or reject applications in investors' interests and for securities-market development and regulation.

Settlement notices must be issued before a show-cause notice, identifying probable charges and proposed enforcement action and allowing sixty days for a settlement application. The mechanism does not apply where interim directions or prosecution are contemplated, or where matters fall within regulation 27. The Board may modify the probable charges or proposed enforcement action, and the notice neither creates an entitlement to settlement nor prevents subsequent enforcement.

Settlement applications for specified proceedings pending before the Board must be filed within ninety days of the later service of the show cause notice or supplementary show cause notice. The time bar does not apply to proceedings pending before the Tribunal or Supreme Court. Transitional applications for proceedings pending on commencement have a ninety-day filing period and carry a twenty percent increase in the settlement amount calculated under regulation 10.

Settlement of specified proceedings may be sought at any stage through the prescribed application, undertaking and waiver, settlement amount computation basis, and applicable non-refundable fee. Facts established or admitted in proceedings in India or abroad concerning the same cause of action are deemed admitted for settlement purposes. A single application must cover all specified proceedings arising from that cause of action. Incomplete or non-compliant applications may be returned and must be revised within fifteen days, failing which they are deemed withdrawn.

For settlement of administrative and civil proceedings, alleged default means an act or omission contravening securities laws that attracts a specified proceeding. A specified proceeding includes proceedings capable of initiation by the Board, pending proceedings before it, and pending appeals for violations of securities laws. Securities laws include the principal securities enactments, other laws administered by the Board, and related subordinate instruments. Settlement amount, settlement terms, stage of proceeding, committees, reports and the Tribunal are defined for settlement purposes.

The Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2026 govern the procedure and terms for settlement of administrative and civil proceedings, including connected and incidental matters. Made under settlement-related and rule-making powers in the securities, securities contracts and depositories laws, they take effect on the day following expiry of 30 days from notification in the Official Gazette.

Section 6A of the Central Sales Tax Act places the burden on a dealer to establish that inter-State movement occurred otherwise than by sale. Before mandatory Form F declarations took effect on 11 May 2002, that burden could be discharged through Form F or other available evidence. Verification under Section 6A(2) is limited to declaration particulars; unsupported presumptions, common parties, or an alleged common modus cannot establish disguised inter-State sales. Inspection material confined to an earlier period cannot support disallowance for subsequent transfers where no further records were sought and depot receipts were treated as stock transfers and taxed locally.