THE HON BILL SHORTEN MP
Minister for Financial Services and Superannuation
THE HON. TONY BURKE MP
Minister for Sustainability, Environment, Water, Population and Communities
A win for water market participants as Government makes water regulation crystal clear
The Hon Bill Shorten, Minister for Financial Services and Superannuation and the Hon Tony Burke, Minister for Sustainability, Environment, Water, Population and Communities today announced that the Government intends to amend the Corporations Regulations 2001 to allow for water rights commonly traded on Australian water markets to be regulated in the same manner as agricultural commodities such as wheat.
“There has been uncertainty in water markets about the legal status of water rights and contracts to trade these rights,” Mr Shorten said.
“This uncertainty has affected irrigators, water brokers, irrigation infrastructure operators and other participants in water markets, and regional communities.”
“The Government appreciates the need to provide certainty, and proposes amendments that will ensure that the trade of water rights is exempt from being considered a financial product under the Corporations Act 2001.”
Water Minister Tony Burke said this issue was raised at one of the very first round table meetings he convened with irrigator groups.
"The situation to date has created considerable complexity and today’s announcement gives water entitlement holders a level of certainty in trade which matches what they have asked for," Mr Burke said.
Australian water market participants are set to benefit from clarification about the appropriate regulations that apply to them.
“The proposed amendments will address concerns raised by some market participants about that lack of clarity as to the role of Australian Securities and Investments Commission (ASIC) in Australian water markets” Mr Shorten said.
Mr Shorten emphasised that the proposed exemption will not apply to the trade of complex products such as options contracts which will continue to be regulated by ASIC.
Once the regulation has been drafted, stakeholders will be encouraged to engage with Treasury to discuss the appropriate scope of the regulations prior to its finalisation. Details about timing and format of stakeholder engagement will be announced in due course.
Further detail on the scope of the proposed exemption is attached.