SEBI Reports Spike in Settlement Pleas; 703 Applications Filed, 284 Cleared in FY25

Markets regulator Sebi has seen a significant increase in settlement pleas as it received as many as 703 applications to settle violations of securities norms in 2024-25, indicating a trend towards resolving disputes without going through lengthy litigation processes.

In the financial year 2023-24, the regulator had received 434 settlement pleas.

Of these 703 settlement applications in FY25, the regulator disposed of 284 by passing appropriate settlement orders during the year, while another 272 applications were returned, rejected, or withdrawn, according to Sebi's 2024-25 annual report.

The settlement mechanism allows entities to resolve cases with the Securities and Exchange Board of India (Sebi), without going through lengthy litigation, by paying a settlement fee and complying with certain conditions.

For the 284 applications that were settled, Sebi collected Rs 798.87 crore towards settlement charges, in addition to Rs 64.84 crore as disgorgement charges.

The settlement orders were issued for alleged violations of various regulations, including insider trading, fraudulent trading practices, Alternative Investment Funds (AIFs), mutual funds, and Foreign Portfolio Investors (FPIs), among others.

Alongside settlement cases, Sebi also dealt with a number of appeals during the year. A total of 533 new appeals pertaining to the regulator were filed before the Securities Appellate Tribunal (SAT) in 2024-25, compared with 821 in the previous financial year.

Out of the new appeals filed, 422 were disposed of with 308 appeals (73 per cent) dismissed, 23 appeals (5 per cent) allowed, 42 appeals (10 per cent) upheld with modification, 21 appeals (5 per cent) remanded, and 28 appeals (7 per cent) withdrawn.

A majority of the disposed appeals, nearly 62 per cent, related to violations of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.

At the same time, "difficult-to-recover" (DTR) dues climbed to Rs 77,800 crore in FY25, up from Rs 76,293 crore at the end of March 2024. These are dues that remain unrecovered despite all available recovery efforts.

Sebi clarified that segregation of such DTR dues is purely an administrative act and does not prevent recovery officers from pursuing them if there is a change in the underlying parameters.