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Major regulatory bodies in support of widening e-conveyancing market
Various government and regulatory bodies have come out in support of expanding the e-conveyancing market as new reports into its competitive benefits are in the works.
Naomi Neilson
A new report by the Independent Pricing and Regulatory Tribunal (IPART) argued the benefits to widening the market’s current structure with interoperability, particularly in respect to its scope of competition and the pricing regulatory framework.
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The report noted: “Interoperability between ELNOs has significant potential to promote competition and allow each party in the settlement process to use ELNO of its choice.”
IPART added it considers “building direct connection” between the two existing ELNOs – PEXA and Sympli – is the preferred approach to achieving the benefits of competition in a cost-effective way, as well as promote innovation and differentiation.
As an online platform, e-conveyancing significantly reduces the risk of error and delays and will enable lawyers, conveyancers and financial institutions to transact together in a smoother, electronic way.
This comes as the Australian Competition and Consumer Commission (ACCC) said it is looking at releasing a report within months which will identify the structure that could most likely offer the most effective services for solicitors and conveyancers.
State governments are under increasing pressure to release technical rules around its e-conveyancing guidelines so that more providers could compete with PEXA. IPART noted the market has evolved to the point where three states have mandated most of its property transactions to be completed electronically.
“We found that implementing interoperability has substantial potential to promote any competition. It would allow users to choose their preferred ELNO and open up network effects in the e-conveyancing market,” the IPART report said.
In analysing four interoperability solutions, IPART found that having existing and direct connections between ELNOs has more potential to promote competition than a central hub and it is more cost efficient than an informational hub.
“Establishing a direct connection between the two existing ELNOs is likely to be most cost-effective to achieving interoperability in the short term, while maximising potential competition and innovation in the market,” IPART said.
Recently, the NSW minister for customer service Victor Dominello endorsed the need for competition around e-conveyancing markets, and noted various law societies and conveyancing bodies are aligned with competition meaning more innovation.
