SEBI NSEL Settlement Scheme for Stock Brokers: What is it?

SEBI’s NSEL Settlement Scheme for Stock Brokers: What is it?The Securities and Exchange Board of India (SEBI) has introduced the NSEL Settlement Scheme 2025, opening a significant window for stock brokers involved in the now-defunct National Spot Exchange Limited (NSEL) platform to resolve pending regulatory proceedings.

The scheme shall be active from August 25, 2025, to February 25, 2026 and is aimed for the benefits of brokers against whom SEBI has already passed orders for trading or facilitating trades on the NSEL platform and whose appeals remain pending before forums such as the Securities Appellate Tribunal (SAT) or jurisdictional courts.

The scheme comes in the wake of the 2013 NSEL payments crisis that impacted thousands of traders and has resulted in prolonged regulatory and legal disputes.

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Scope, Eligibility and Exclusions

SEBI has maintained that the scheme is strictly for settling violations relating to securities laws and has no bearing on any matters that are still under the purview of other investigative agencies such as the Economic Offences Wing, Enforcement Directorate, Serious Fraud Investigation Office or any other law enforcement bodies.

Essentially, while regulatory matters with SEBI can be concluded the settlement does not affect any ongoing or future criminal or similar enforcement proceedings that may be taken against the stock brokers by these agencies.

Eligibility to participate in the scheme is subject to several caveats. Brokers whose names appear in charge sheets filed by law enforcement agencies, or who have been declared defaulters at any stock exchange as of the date of application, are expressly excluded from availing the scheme.

Furthermore, if any broker who has availed the scheme is later named in such a charge sheet concerning the NSEL matter, the settlement benefit granted under the scheme will stand voided.

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Settlement Structure and Terms

A June 18, 2025 report from Moneycontrol states that the scheme incorporates a well-defined monetary structure for settlement. The amount payable is determined based on the number of units involved in “paired contracts,” with a tiered calculation for different volumes of trades.

For up to 25,000 units, a flat fee is levied, while larger trades attract incremental charges, subject to an overall cap. An additional amount equivalent to 0.01% of the total traded value, in paired contracts will be added, bearing a minimum of ₹5 Lakhs.

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Beyond the financial settlement, the scheme may require brokers to accept voluntary debarment from the securities market, ranging from one to six months depending on prior regulatory actions.

However, stakeholders are advised to wait for a comprehensive set of frequently asked questions (FAQs) that shall be available on SEBI’s website from August 25, 2025. The FAQs are slated to address all queries and guide stakeholders through the settlement process.