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The first transaction using the e-conveyancing interoperability system has been completed, with the first pilot transactions being deemed a success by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC).
The move to interoperability aims to allow each party in the settlement process (for example, lawyers, conveyancers, and financial institutions) to use the electronic lodgment network operator of their choice, irrespective of what the other transacting parties choose to use.
The first two transactions have now been completed in Queensland.
The refinance transactions involved two electronic lodgment network operators (ELNOs), Sympli and PEXA, with the two lenders involved being the Commonwealth Bank of Australia and National Australia Bank.
ARNECC said the transactions were designed to test the capacity of both ELNOs to act as the responsible ELNO and the participating ELNO in an interoperable workspace, liaise with the outgoing and incoming mortgagee banks and complete lodgment of the associated dealing at the required land registry.
It stated: “ARNECC is pleased to announce that the day 1 transactions were completed successfully on 12 September 2023 in accordance with the current program timeline.
“The day 1 transactions represent a critical milestone, demonstrating that the technical solution developed by ELNOs is capable of delivering on its objective – enabling electronic lodgment networks to interoperate in order to complete an electronic conveyancing transaction,” the body said in a statement.
The conveyancing council said the next phase of the interoperability reform was the designing, building, testing and implementation of interoperable functionality for all users.
ARNECC reiterated “the importance of maintaining the momentum behind the reform to ensure that a complete interoperability solution is developed efficiently and expeditiously”.
Sympli labelled the “day 1” pilot transactions a successful step “towards real competition”, and it marked a “significant step towards bringing real competition to the electronic conveyancing market”.
The ELNO said: “Whilst today (12 September) highlights that government and industry are ever more determined to bring competition to this market, it is also a stark reminder that we are still years behind schedule, with day 1 first scheduled for 2021 and full interoperability originally due to be live by mid-2023.”
Sympli chief executive officer Philip Joyce added: “It is critical that we keep this momentum towards full interoperability going full steam ahead to ensure we meet the goal promised to industry of competition by 2025 at the latest. Customers deserve the benefits of competition as soon as possible.”
PEXA confirmed the pilot tests were successful; however, its chief customer and commercial officer, Les Vance, added it was conducted within a low-risk environment.
Speaking to The Adviser, Mr Vance commented: “The first two interoperability transactions have been completed this week and were conducted in a controlled, low-risk setting involving two refinancing cases and two banks.
“As we now enter a period of review, it’s important to note we are still at the very early stages of the overall program.
“There is still a long way to go to deliver interoperability between ELNOs given the complexities of the reform. By comparison, there are 3.7 million property transactions that occur on the PEXA platform each year across Australia, between approximately 160 lending institutions, more than 10,000 practitioners, six land titles offices and five state revenue offices.
“We will continue to work constructively with governments through the interoperability program to ensure the continued reliability, resilience and security of e-conveyancing across the country.”
The pilot came after both Sympli and PEXA appeared before the House of Representatives’ standing committee on economics to discuss the lack of competition in the e-conveyancing industry and PEXA’s perceived monopoly.
PEXA currently holds over 88 per cent of the conveyancing market share, but the interoperability regime aims to facilitate competition by allowing practitioners to transact efficiently with all other parties while subscribing only to the ELNOs they choose.
[Related: PEXA ‘welcomes competition’, disputes current interoperability view]
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