Phase 1 of the Water Markets Intermediaries Code (Code) came into effect on 1 July 2025. The Code sits under the Water Act 2007 (Cth) and governs the conduct of water market intermediaries with their clients.
The Code is part of the broader water market reform being undertaken by the Federal Government in respect of the Murray-Darling Basin and follows the final report published by the ACCC in March 2021 after completing the Murray-Darling Basin water markets inquiry (2019-2021).
Are you governed by the Code?
The Code applies to water market intermediaries. This is anyone who provides any of the following services in relation to eligible tradeable water rights (water rights):
• trading on behalf of a client in exchange for a commission or fee
• investigating trading possibilities in exchange for a commission or fee
• preparing trade documentation in exchange for a commission or fee
• providing an online trading platform (with exceptions)
• representing that a water right is available for sale or purchase, if the person will facilitate the trade of the water right for a commission or fee
• giving advice in the course of providing any of the above services in relation to water rights
Typical water market intermediaries are water brokers, water exchanges, certain online trading platforms and irrigation infrastructure operators offering the above services (such as operating an exchange).
Implementation of the Code
The Code will be implemented in 2 phases. Phase 1 came into effect on 1 July 2025. Phase 2 comes into effect on 1 October 2025.
Phase 1
Phase 1 covers conduct and principled obligations including:
• dealing in good faith
• acting on lawful client instructions
• putting the client’s interests first
• avoiding conflicts of interest
• maintaining client-intermediary confidentiality.
Phase 1 also imposes requirements on trust accounts operated by intermediaries. This includes the naming of trust accounts, the contents of trust account statements and auditor’s reports.
Phase 2
Phase 2 covers the more operational obligations of water market intermediaries. It is Phase 2 of the Code that will require water market intermediaries to take a close look at and then update their documentation and practices to remedy any non-compliance with the Code.
Specifically, Phase 2 implements the Code requirements on the following:
• terms of engagements
• providing information about services to clients or potential clients
• authority to act (including two distinct tiers of authority – broker and agent)
• broking water accounts
• trust accounting practices, including the preparation of mandatory trust account ledgers, broking water account ledgers and statements
• professional indemnity insurance
• record keeping relating to certain Code obligations
• complaint handling
Compliance with the Code
The Code is being enforced by the ACCC. With the phased approach giving water market intermediaries time to prepare for some of the new obligations, now is the time to act and review current practices and procedures. It is crucial that water market intermediaries update their documentation and practices to be Code-compliant.
Our Agribusiness team has expertise in water law and regulation specifically in the southern Murray-Darling Basin and have assisted clients during the ACCC’s water markets inquiry.
If you require assistance to ensure your documentation and practices align with the Code, please contact Leah Cowell or a member of our Agribusiness team.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.