Information Session On Pre-trade And Lodged Entitlement Trade Data Obligations

The information provided in this webinar transcript is intended to provide stakeholders with access to the key information conveyed at the recent Information session on the Water Markets pre-trade data obligations for data providers policy position paper held on 24 March 2025 at 11am AEDT.

Any information provided within this webinar transcript is not intended to be relied on as professional or legal advice and parties should obtain their own such advice on the matters referenced.

While every effort has been made to provide a comprehensive and accurate transcript of the dialogue from the relevant webinar, the transcript may contain minor grammatical and editorial corrections to ensure the information as it appears in written form is readable.

Cynthia TUPICOFF

Well, I just wanted to thank everyone for joining the session today to discuss the policy position for pre-trade data obligations for data providers.

My name is Cynthia Tupicoff.

I'm a Director with the Water Policy Division. Angus McDonald will be stepping you through this presentation and Matt Walker and Linton Johnson from the Bureau of Meteorology will be online to answer any technical questions in relation to implementation and the Bureau's role in these reforms.

Given this is an online session, I'd like to acknowledge the traditional owners of country throughout the Basin and Australia, and acknowledge their continuing connection to land, waters and culture, I'd like to pay my respects to their elders, past and present.

So, the aim of today's session is to really step you through the areas of the paper, answer any questions you may have in relation to the paper. So, the information provided in this session about the policy position paper is really intended as a summary only and it's not a substitute for the information which is set out in the policy position paper itself.

Any information discussed today is not intended to be relied on as professional or legal advice, and the parties should obtain their own such advice on the matters discussed. But first, before we get into the presentation, I'd like to set out a little bit of general housekeeping.

Could you keep on mute when you're not speaking?

And note that time has been allocated towards the end of the session and we can answer your questions.

Then I'd ask you if you could use the chat thread to make any comments and then we can go through those and answer your questions and you can start doing that throughout the session. If you would also like, you can use the raise your hand function if you'd like to contribute. But what we might do is work through the chat first and then we can see if we can then revert to hands up after that.

Please note that this information session will be recorded as I said and posted on our website. So, you can have a look at that at a later time if you want to catch up on any details then OK, next slide.

So, I'm sure you're all aware of the background to these reforms, but I'll do a quick recap regarding the issues raised in the paper.

Building on the recommendations of the 2021 ACCC inquiry report into Murray-Darling Basin water markets, the water market reform final Roadmap report recommended the Commonwealth broaden and strengthen the requirements for trade approval authorities and IIOs [irrigation infrastructure operators] who approve trades within their networks to report price data for all tradable water rights, including delivery rights and irrigation rights. Further, that this data be available to water market regulators to improve regulatory oversight of market conduct and that de-identified data be made publicly available to improve water market transparency.

The Roadmap also recommended the Commonwealth require water market intermediaries to report pre-trade data. That is buy and sell offers for all tradable water rights, including water delivery and irrigation rights, and that this be implemented in phases.

This paper is focused on the pre-trade component of these reforms. In December 2023, the Australian Parliament passed the Water Amendment Restoring Our Rivers Act to enable and support implementation of various Roadmap recommended reforms by amending various parts of the Water Act, and this act introduced a new Part 7A into the Water Act, which commenced on the 1st of July 2024, and it imposes obligations on data providers to collect, generate, record and give specified kinds of water markets, information to the Bureau. This policy paper provides the final policy positions on proposals relating to pre-trade water markets data, including proposed data providers and kinds of pre-trade data. The paper also sets out the policy position on pending entitlement trade data.

Other proposals to support regulations development focused on post trade obligations under the new part 7A have been provided to stakeholders in a separate paper and that paper is available on the DCCEEW website. I'll now hand over to Angus to step us through the final policy positions. Thanks, Angus.

Angus MCDONALD

Thank you, Cynthia, and thanks everyone for joining us this morning. So, in the October 2024 policy proposal paper DCCEEW consulted with stakeholders on the proposed pre-trade water markets data obligations.

These obligations would require water markets intermediaries operating online trading platforms to provide the Bureau with pre-trade data for both allocation and entitlement trades, information related to bids and offers and matched trades.

We heard from stakeholders that they were concerned the administrative burden of this proposal outweighs the benefit of collecting pre-trade data and that some online trading platforms may close or change operations as a result of the proposed requirements. So, to address these concerns, DCCEEW has removed the requirement to provide matched trade data and the requirement to provide bids and offers data for entitlement or permanent trades. Further, a new requirement for Basin state water market authorities has also been included. This is aimed at increasing transparency for entitlement trades, addressing an industry concern about the length of time it takes for entitlement trade data to be made public and reducing the regulatory burden on industry. It should be noted that this data is not being considered as pre-trade data but is being progressed at the same time for available resourcing.

Next slide please.

As previously mentioned, pre-trade data obligations remain similar to the proposals put forward in the October 2024 paper, except the match trade and entitlement trade data will not be required to be reported by these entities.

Table one from the position paper is included here to assist. So this means that from 1 July 2026 intermediaries operating trading platforms that include live matching functionality will be obligated to provide buy and sell offer information for allocation or temporary water trades that are published by the online platform and have the potential to be live matched and from 1 July 2027 all intermediaries operating online platforms will be obligated to provide buy and sell offer information for allocation or temporary water trades that are published via the online platform.

So, the data will need to be provided by the intermediaries to the Bureau within one hour of the information being published or changed on the platform. To help better understand these positions, we've included further information in the paper,

including that live matching occurs where buy and sell offers posted on a trading platform are automatically matched and once matched there is an obligation to proceed with the trade, and further, that the definition of trading platforms is intended to include web-based water exchanges, online bulletin boards and online options. Noting, however, that where a platform does not receive a Commission or fee for facilitating the trade or transfer, these will not be captured by these reporting obligations. And consistent with the October 2024 paper, it is the policy to not include intermediaries that operate offline services within these obligations.

There is currently no feasible way to capture bids and offers received by brokers without an online platform. It should be noted there will be no requirement to provide historical pre-trade data prior to these data reporting obligations commencing.

Next slide, please.

So, in responding to stakeholder views from the October 2024 paper, we have brought in the policy position to include a new obligation for Basin state water market authorities to report information about water access entitlement trades when the trade application is properly made.

So this is in addition to providing finalised trade information.

This measure aims to increase transparency for entitlement trades, including pricing.

While not proposed in previous papers, this obligation is aimed at addressing an industry concern about the length of time it takes for entitlement trade

data to be made public, and as noted earlier, while it is not considered pre-trade data, it's being progressed at the same time for available resourcing.

This new obligation will only apply to Basin state water market authorities as persons authorized or required to approve, allow or register the trade or transfer of an eligible tradeable water right.

This obligation is expected to commence on 1 July 2026, with requirements for reporting to the Bureau to be set out in the water markets data standards.

This information will be published by the Bureau from 1 July 2026.

Next slide please.

Consistent with the October 2024 paper, the Bureau will publish pre-trade water markets information from 1 July 2027. However, as noted previously, data from entitlement trade applications lodged with Basin state water authorities will be published from 1 July 2026. Publication will not include an individual's identification unless the information is already public. Regulators such as the ACCC and the Inspector-General will have access to the data from the time of its collection to support their responsibilities under the Water Act.

Next slide, please.

So, looking forward to next steps. At this time, we anticipate releasing an exposure draft of the regulations for public consultation in late 2025. So, this will give a great opportunity for stakeholders, industry, other government authorities to look at what the law will actually be and then provide comments of course. So following consideration of stakeholder views and any necessary redrafting, the regulations will be finalised in the first half of 2026 and then commence from 1 July 2026.

I must caveat this time of course that there is a Commonwealth election due in the near future, so this may alter these timings or even potentially alter the policy positions. I'll now hand back to Cynthia.

Next slide please.

Cynthia TUPICOFF

Thanks very much, Angus.

Now might be just another opportunity I suppose to answer any questions. We put the housekeeping there in the chat for anyone that wants to have a look at that and I did just clarify the point about the reason why I made that comment around, you may need to seek some legal advice, and that's mostly as to how these policy positions might relate to your particular circumstances. And there's also a comment - yes, we know there was someone who wasn't on the email list and we can email the slides to you.

Now, given that we haven't got any further questions in the chat I might just check if there's anyone who wants to actually raise a question directly, if you'd like to put your hand up. Or if everything is 100% crystal clear, that's great, because that's what we aim for in terms of the policy. OK, Robert.

Robert

Sorry if this was covered at the start, but I've just got a question which I suppose is, what's the benefit of reporting on pending trade data rather than just when the trade transaction is actually completed? What's the benefit of having that pending data in the meantime?

Cynthia TUPICOFF

Maybe I can kick off the answer and then Angus, you can add in anything I might have omitted.

We're really looking, I suppose, to give more timely data to the market in relation to those entitlement trades. Sometimes that can take quite some time, given that settlement periods can be quite long for entitlement trade, such that we want to give that information at a timely and central location, so it'll be available at the Bureau point so people can go to that one point, find that information in a timely way and then later there'll be that finalised data, but that might be sometime down the track.

It also, I suppose, gives the regulators access to that information in a more timely way. So, it gives them that information to ensure there's integrity in the market. But over to you, Angus, there might be further points.

Angus MCDONALD

Yeah. Thank you, Cynthia.

Look, that's correct.

You know the one of the core aims of these reforms is to increase transparency, including around pricing etc. So of course, some jurisdictions are quite short and quite timely with when they publish that and other jurisdictions are a slightly longer time.

Robert

Yeah, that was that was going to be my follow up question.

What's the current kind of lag?

What's the size of the problem that this would fix?

Angus MCDONALD

I might pass to the Bureau for that one. I've got more detailed information, but just on this one, so providing this, it's another element within the stream that these reforms are aimed at increasing the pricing transparency and assisting people with more timely information. And we appreciate that entitlement pricing doesn't change that much. But you know there's some talk of 5 to 10% which can. That can be quite sizable over time.

So look, I might pass to Matt or Linton to see if they might be able to provide some more current estimates on some of the timing differences between jurisdictions, please.

Matthew WALKER

Yeah, no problem.

Thanks, Angus, and thanks for your question Robert.

Yeah, essentially it can range from weeks to months in terms of the difference between when the time a properly made application is first lodged with a Basin state right through to the time that it's fully settled and registered on the various state register systems.

So I guess this was a great opportunity to be able to provide that price discovery information earlier.

There will be caveats saying that this isn't finalised data, it could be subject to change.

But it really was an opportunity to be able to get that information out earlier in terms of a price discovery point of view.

Robert

Yeah, that was going to be my next question actually.

Because it's still pending, how many of them actually do go through to final settlement?

Because otherwise it may not always be, a certain percentage don't actually reach settlement and then that pending data may not be useful information for the market.

Matthew WALKER

Sure. And I think we're going to be very clear and careful how we caveat that data in terms of clearly flagging that data as pending or preliminary data as opposed to the finalised data which is, I guess, that point of truth information, but we did recognise there is a significant time lag. It varies across jurisdictions and it has been raised as an area for improvement. So, I think this has got opportunity to do that.

Robert

Yeah. Thanks.

Cynthia TUPICOFF

I might just go to a question which has been raised in the chat by Lex Batters about why this shift in the paper from the previous paper was there. We've removed the requirement for data providers to provide matched trade data, and he notes it's seemingly a big loss to what you're trying to achieve. I think and I will throw to Angus in a moment with this, but I understood it was really an effort to address the concerns that were raised from stakeholders. That this was going to be a significant burden without the necessary benefit. And that it was seen as not really achieving that outcome. Angus.

Angus MCDONALD

Thank you, Cynthia. Yeah, that is correct.

That's what we heard in the feedback and I see Rosalie's asked a similar question too.

Yeah, it's matched trade data that was seen as adding this administrative burden and that it was overreach.

So, that was the feedback that we heard.

There wasn't much support, if any, for retaining matched data, so that's why we've transitioned to that. And that's also why we're utilising this pending entitlement trade data with the basin states. So, it was attempting to address what we saw as the commentary on that.

Cynthia TUPICOFF

Thanks Angus.

I also just wanted to clarify; there's a request there - when will we be publishing the recordings of each of these information sessions? And I can see that's really of interest to people. We do try and get the recordings up on the website as soon as possible.

We also seek to provide a transcript which is as close as possible to the recording. We may try and make sure any sort of grammatical errors, etc. are corrected. So, we try and get that up as soon as possible.

And then you can look at either the transcript or the actual recording whichever you prefer. So, we seek to do that as soon as we can.

I see that you've already answered this question.

Now Craig mentions these are automated systems and removing one sort of data from the stream is more challenging.

I don't know if Angus you want to respond to that.

Angus MCDONALD

Thank you, Cynthia. I'm assuming this is in relation to the matched data.