Water brokers may soon be regulated like real estate agents and financial professionals, according to a new report.

Former Department of Agriculture and Water secretary Daryl Quinlivan has been overseeing a committee to develop a roadmap for implementing a mandatory code of conduct for water brokers.

Water trading and speculation has been linked to increased costs of the vital resource.

Basin state governments have agreed to provide in-principle support for the planned legislation.

Mr Quinlivan it is a significant development.

“It would require intermediaries to act in the clients' best interests, and have complaints handling processes, record-keeping obligations and the use of trust funds to handle clients' money,” he said.

“The water broking community have been quite strong supporters of this recommendation.”

The new laws are expected to mirror an existing voluntary code developed by the industry, which has not been widely adopted. It is still unclear who will be responsible for enforcing compliance.

The legislation should prohibit market manipulation and insider trading.

Much of the detail was spelled out by an ACCC report, but the report’s proposal to create a ‘Water Markets Agency’ to oversee and regulate the market, as well as the traders, brokers and other intermediaries that operate in it, does not seem to have been picked up. 

A roadmap for implementing water marker reform should be delivered to the federal water minister in June.