WATER trading will be untangled under new regulations announced by the Federal Government today.
Water Minister Tony Burke and Minister for Financial Services Bill Shorten said the changes to the Corporations Regulations 2001 would allow for water rights to be traded in the same way as other commodities.Mr Shorten said there had been some uncertainty in water markets about the legal status of water rights and contracts to trade these rights.
Australian Water Brokers Association president Phil Grahame said there had always been some level of doubt as to whether water trading was a physical or financial product.
"If it's a financial product then those involved in the trade need to be licensed under financial services legislation,'' Mr Grahame said.
"These changes make it clear that it is a physical product, not a financial product.''
Mr Grahame said there was always some uncertainty "in the background'' about trading water as it was "just numbers on registers.''
He said the clarification by the Federal Government was good news.
Mr Shorten said the proposed amendments would address concerns raised by some market participants about that lack of clarity as to the role of Australian Securities and Investments Commission in Australian water markets.
Mr Shorten emphasised that the proposed exemption would 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 before they are finalised.
