SEBI Board Revamps Settlement Framework And Approves Common Advertising Code

Key facts

• The Securities and Exchange Board of India (SEBI) approved a revised settlement framework with a new formula comprising a base amount linked to minimum penalty, multipliers for stage of proceedings, regulatory action factor, gravity of violation and aggravating factors.
• SEBI separated wrongful gains from the base amount calculation, with such amounts disgorged separately, removing double counting in settlement computation.
• SEBI will issue a settlement notice before a show-cause notice, giving entities 60 days to file a settlement application.
• The new settlement regulations will come into force the day after 30 days from notification.
• SEBI approved a common advertising code replacing entity-specific advertisement frameworks, allowing celebrity brand-level promotions; celebrity endorsements by stock brokers, depository participants, investment advisers and mutual funds require prior approval, while other advertisements no longer need prior approval.
• Five listed Adani Group companies settled SEBI adjudication proceedings for Rs 1.5 crore over alleged disclosure and corporate governance violations linked to the Hindenburg research report.
• SEBI backed the closing auction session (CAS), proposing a blended system combining volume-weighted average price with CAS for determining equity closing prices; the consultation paper closes on October 3 with over 3,500 comments received.
• The changes were announced at a press conference after SEBI's board meeting in Mumbai on Thursday, September 25, 2026.