Government Proposes Rules for Mineral Exchanges with Price Limits and Trading Checks

The Centre has issued draft Mineral Exchange Rules, 2026, setting out how mineral exchanges would operate in India. The proposal was released on March 19, with comments invited from stakeholders until April 18.  

The rules follow recent amendments to the Mines and Minerals (Development and Regulation) Act, 1957, which allowed the creation of such exchanges. 

Regulator May Intervene in Pricing 

The draft gives the Indian Bureau of Mines (IBM) the authority to step in during market disruptions.  

It may set floor or ceiling prices, suspend trading in periods of sharp volatility, and withdraw specific contracts. These provisions bring pricing and trading activity under closer supervision. 

Registration Requirement for Platforms 

Existing mineral trading platforms will need to register as recognised exchanges within 6 months of the first exchange becoming operational or shut down.  

The aim is to move trading to a formal electronic system based on delivery-backed contracts, replacing the current fragmented setup. 

Rules on Market Conduct 

The draft sets out restrictions to address market misuse. Activities such as cartelisation, insider trading, and circular trading are not permitted.  

Exchanges will be required to maintain audit trails and monitoring systems to track transactions, price movements, and participant activity. 

Disclosure and Transparency Measures 

Exchanges must publish trading data, including minimum, maximum, and average prices. Historical data and demand-supply trends will also need to be disclosed. These requirements are intended to make pricing information more accessible. 

Eligibility and Governance Norms 

The framework sets a minimum net worth of ₹50 crore for exchanges. Ownership rules are included to prevent concentration, and trading members cannot be part of exchange boards. These conditions define how exchanges are to be structured and managed. 

Risk Management Requirements 

Exchanges will need to create settlement guarantee funds and put in place systems to handle defaults. The rules also require mechanisms for clearing and settlement to ensure trades are completed without disruption. 

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Conclusion 

The draft rules set out a framework for regulated mineral exchanges, covering pricing controls, trading norms, and oversight mechanisms. Stakeholder feedback will shape the final structure. 

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