Check eligibility under the Water Act 2007 first: Because the instrument applies only to persons who are eligible water markets intermediaries under the Water Act 2007 (s 4 and s 5), the primary compliance step is to verify that status against the Water Act definitions. The instrument does not redefine eligibility. Advisers should therefore confirm any person’s statutory eligibility under the Water Act 2007 before relying on the exemption.
Confirm professional status and State law coverage: An intermediary must be either (i) enrolled as a legal practitioner of a federal court or a Supreme Court of a State or Territory, or (ii) licensed/registered as a conveyancer under a State or Territory law listed in s 5(2) (s 5(1)(a), s 5(2)). Practitioners should obtain and retain evidence of enrolment or licence, including current practising certificates or conveyancer registrations, and confirm that the enrolment/licence is active for the period in question.
Document contemporaneous provision of qualifying services: The exemption applies “during any period when” the person both provides water markets intermediary services and, in doing so, provides legal or conveyancing services under a listed State law (s 5(1)(b)). Firms should maintain contemporaneous records demonstrating the nature of services provided to each client, including engagement letters that set out whether services are being provided as water markets intermediary services, legal services, or both, and identify the legal basis under a listed State law where relevant. Time-stamped records, file notes and client instructions will assist in proving that the conjunctive conditions were met in any disputed period.
Map which federal provisions are being disapplied: Advisors should document which specific obligations in Subdivisions B and C of Division 1 of Part 5 of the Water Regulations 2008 are relevant to their practice and which of those will be disapplied during the exemption. Because the instrument preserves any provisions made for the purposes of Division 5 of Part 5 of the Water Act 2007, firms must identify trust-accounting obligations that remain applicable and ensure they continue to comply with those.
Review State trust-accounting regimes: Given the instrument’s note about s 100Q of the Water Act 2007 and Division 2 of Part 5 of the regulations, intermediaries should determine whether their trust-accounting arrangements under State law will result in Division 5 being disapplied under the Act. If an intermediary maintains trust accounts in accordance with prescribed State law, Division 5 may be disapplied under s 100Q of the Act, changing the set of federal provisions that otherwise apply. Obtain specialist advice on the detailed State trust-accounting prescriptions and how they align with any federal trust-accounting requirements preserved by the instrument.
Train staff and align engagement processes: Because the exemption depends on contemporaneous activity, firms should adopt internal procedures to identify when an employee or contractor is providing combined legal/conveyancing and water intermediary services. That can include checklists for client intake, segmented billing codes, and flags in matter-management systems to record when the exemption is intended to apply.
Maintain professional indemnity and compliance arrangements: Although the instrument exempts certain federal regulatory obligations during qualifying periods, State professional conduct, indemnity and disciplinary obligations remain relevant. Confirm that professional indemnity insurance covers activities performed under both the water intermediary and legal/conveyancing roles, and that practice management systems comply with State regulatory expectations.
Be prepared to demonstrate compliance: Because the instrument does not create a registration or notification requirement, intermediaries should be prepared to demonstrate, on request from a regulator or in proceedings, that they met the conditions in s 5(1) and were therefore entitled to the exemption. Maintain auditable records for each matter showing the nature of services provided, the basis on which they were given, and documentary proof of State licencing or enrolment.
Seek contemporaneous legal advice where borderline: If activities blur the lines between what counts as a water markets intermediary service and what counts as legal or conveyancing services under a listed State law, obtain advice. The instrument’s exemption turns on factual and legal characterisation of services (s 5(1)(b)). Where the facts are borderline, a proactive legal opinion will reduce the risk of later enforcement action.
Monitor regulatory and statutory changes: Because the instrument’s operation depends on other statutes and regulations (Water Act 2007, Water Regulations 2008, and the listed State laws), intermediaries should monitor changes to those instruments. Any amendment to Division 5 of the Water Act 2007, the Water Regulations, or the listed State statutes and regulations could alter the scope or effect of the exemption.
Record reliance as part of governance: Firms should include reliance on this exemptions instrument in their compliance registers and internal governance documents, noting the specific facts that justify the exemption for each matter. That governance step helps ensure decisions about which regulatory regime applies are transparent and defensible if challenged.