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Advice to the Lands Minister’s Office

Advice to the Lands Minister’s Office

AICWA again met with representatives from the Land’s Minister’s office recently to discuss aspects of concern regarding the regulation to require all eligible documents to be settled electronically. The following 6 key points have been offered to the Minister’s office for consideration:      

1. ARNECC’s role as a ‘regulatory body’

ARNECC should be congratulated for having achieved the joint creation of a platform and framework that is now PEXA. 

However, the AICWA strongly believes that moving forward, ARNECC and the state-based Registrar’s involvement should not extend to regulating a national, billion dollar financial settlement platform.

Instead, we believe that the time has come for a more appropriate body such as APRA to take over regulation of the electronic settlement eco-system.

Initially, we would welcome a truly independent review of the regulatory framework under which the ELNOs operate, and expect that such a review would support our belief that ARNECC is no longer suited to this role. We believe that a mandate before the results of this independent review have been finalised, and made publically available would be incredibly premature.

2. Pricing Policy

AICWA has made a number of submissions to Landgate, ARNECC and other bodies requesting evidence of the Registrar’s power to regulate ELNO pricing.

The only obligation an ELNO has in relation to pricing is Rule 5.3(e) of the Model Operating Rules:

“The ELNO must determine its fees according to a publicly available, equitable and transparent pricing policy which is kept current by the ELNO and includes the manner in and frequency of which prices will be reviewed by the ELNO”

There is no Rule in the Model Operating Rules which requires Landgate/Registrar/ARENCC to approve the PEXA’s Pricing Policy or amendments thereto. 

The Registrar’s Powers (Rule 20 of Model Operating Rules) do not extend to Pricing.

We welcome the assistance from the Minister for Lands in highlighting to us where in the legislation states that the Registrar does in fact have this power.

Our concerns in this regard lie in the fact that currently, with only one ELNO in operation, and what we understand to be no true power for the Registrar to regulate PEXA’s pricing, there is little stopping PEXA in the months or years to come significantly increasing their prices to the detriment of consumers.

3. Account verification

With a rise in the occurrence of email & computer-based fraud in Australia, we have significant concerns around the lack of account verification in PEXA.

In a paper settlement, we would physically walk a bank cheque to a branch, and deposit it at a teller. The teller cross-checks the name of the account with the name on the cheque.  If our client’s emails had been intercepted, and a fraudulent account given to us, we would usually be alerted at the point of deposit that the account name does not match the cheque.

Furthermore, if a fraud is identified in the day or two following a paper settlement, there is a window of time for the cheque to be stopped and the fraud prevented.

With electronic settlements’ almost-instant funds transfer, these two fraud-minimisation strategies are lost.

Only this week, two Queensland law firms had their emails hacked and as a result, millions of dollars have been redirected by fraudsters.

AICWA has long-requested that the banks & PEXA invest into the development of an account verification system that checks cross-checks not just the BSB & Account Number, but also the Account Name for recipients of funds.

4. Scope of eligible documents

Currently, and it is expected also as at 1 May 2018, only 60% of transactions are considered eligible to be completed electronically.

Many of the 40% of ineligible transactions fall out of scope due to limitations of the Office of State Revenue ROL system and Landgate’s 130+ document types.

It would be prudent of the Government to be allocated additional funding to OSR and to Landgate to see much needed improvements made to ROL and to assist Landgate in fast-tracking their form rationalisation project, thus greatly increasing eligibility.

Ideally, 85% or more transactions should be eligible prior to regulation to mandate.

5. ELNO Insurance

Further to the point above on account verification, we have concerns over the amount of insurance that an ELNO is required to have.

Currently, this amount is only $20 million.  This cap could quickly be reached, particular if two or three eastern-states properties were fraudulently transferred, and then where does that leave the ELNO, and thus, our State & clients?

6. ELNO and Landgate’s BCP & Redundancy plans

The AICWA have on a number of times requested detailed information from PEXA and Landgate as to their redundancy and BCP strategies. To date, all that we have been in given in response is assurances that these plans exist and will work, if they are ever needed.

As I’m sure you can appreciate, assurances are wonderful, but to really give us, our members, and our customers confidence in the electronic system, we require a much more detailed account of that these plans entail.


AICWA would like to drive home the point that the we fully and actively supports the development of e-Conveyancing in WA.

We have always, and will continue to, work closely with our members and other industry bodies to ensure the smoothest of transitions as we move towards the new digital age of property settlements.




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