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New water markets obligations and prohibitions
New laws came into effect on 1 July 2026 that make certain market activity illegal.
They include market manipulation and insider trading.
The new laws include obligations on water markets decision-makers to communicate decisions and keep detailed records.
Conduct that is prohibited
From 1 July 2026, new laws make it illegal to:
- enter into a trade or transfer of eligible tradeable water trading rights while aware of inside information that is likely to have a significant impact on the price or value of those rights
- decide not to enter into a trade or transfer of eligible tradeable water trading rights while aware of inside information that is likely to have a significant impact on the price or value of those rights
- communicate inside information that is likely to have a significant impact on the price of water rights to someone, knowing it will affect their decision to trade in or transfer the rights.
‘Eligible tradeable water rights’ are rights related to the taking or use of water in the Murray-Darling Basin that are able to be traded or transferred. These include but are not limited to water access rights and water delivery rights.
Further details on prohibited insider trading conduct are set out in the (Water Act).
Types of inside information
Insider trading happens when someone is aware or ought to be aware of inside information and engages in prohibited activities.
A reason a person ‘ought’ to be aware of inside information may be due to where they work, such as their role in an agency or an organisation.
Generally, information is inside information if:
- the information has not been available long enough for the public to know about it, and
- the information is material. This means that if the public knew about the information, it would be reasonably likely to influence the trading behaviour of people who commonly trade in the impacted eligible tradeable water rights.
The insider trading provisions apply to 2 types of inside information: ‘water announcement information’ and ‘non-water announcement information’.
Water announcement information
This includes water markets decisions or information relating to these decisions, where the information:
- has not been announced or been available long enough for the public to know about it, and
- would be reasonably likely to influence trading behaviour if the public did know about it.
Prohibitions on insider trading involving water announcement information are set out in section 101H of the Water Act.
Non-water announcement information
This is information that is not water announcement information, and:
- it has not been available long enough for the public to know about it, and
- would be reasonably likely to influence trading behaviour if the public did know about it.
Prohibitions on insider trading involving non-water announcement information are set out in section 101JA of the Water Act.
Prohibited trading activities
Trading, or deciding not to trade in eligible tradeable water rights, while aware of inside information, will be illegal under the water markets insider trading laws. Prohibited trading activities typically involve using inside information to gain an unfair advantage in a trade or transfer of an eligible tradeable water right.
Example scenario
Joe is an irrigator and is friends with the resource manager for his region.
At dinner, the resource manager tells Joe the water budget for his water system and allocation for his catchment will be higher than usual. This information hasn't been announced.
Joe takes advantage of this inside information. He sells his temporary water rights before the market learns about the increased availability and prices start to fall.
In this scenario, Joe may have broken the law under section 101H. This is because he knew inside information about the eligible tradeable water rights he agreed to trade.
Communicating inside information
It is illegal to communicate inside information to someone, knowing they are likely to use it for insider trading.
Example scenario
Lisa is a director of a private agribusiness and is married to John.
Lisa knows her business is about to expand and establish a large number of new permanent plantings. This has not been publicly announced. The expansion is likely to significantly increase the price of eligible tradeable water rights in that trading zone.
John was planning to enter a contract to sell eligible tradeable water rights that he holds in that trading zone. Lisa tells John about her upcoming expansion, knowing he would likely wait to sell his water rights until after the expansion is announced and prices rise.
In this scenario, Lisa may have broken the law under section 101JA. This is because she communicated insider information to John, knowing he was likely to engage in prohibited conduct.
Penalty
Such conduct can attract a pecuniary penalty.
For more information see compliance and enforcement of water markets integrity provisions.