Introducing Property

Exchange Australia

(PEXA)

October 2013

2

The Australian Property Market is made up of:

• 8 registries

• 143 mortgage lenders

• 9500 practitioners

• $3.5 trillion in registered properties

• $280 billion property transactions

The Australian Property Market

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Individual State Registry Offices had made good progress with their own e-Conveyancing initiatives.

To be a viable solution for the nationalised banking-sector, a national platform was required and so co-ordination between the 8 Australian Land Registries was needed.

NECDL was established to develop a commercial business model that:

- is customer-centric;

- aligns the interests of all stakeholders; and

- is privately owned and funded.

A regulatory structure was established by a council of the Land Registries (ARNECC) to develop the legal framework around e-Conveyancing.

The Background to e-Conveyancing

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Remove state-based initiatives:

- NECDL acquired the existing eConveyancing IP from the States

Align commercial and government interests:

- NECDL sought equity based development funding from the States with the expectation of strong commercial returns for all shareholders

- Funding was broadened to include the major banks (CBA, NAB, ANZ, Westpac, Macquarie) who also stand to gain as a direct result of eConveyancing

Create a National Law:

- ARNECC has developed National Law that is currently being passed through the States

Create a set of National Data Standards:

- ARNECC and NECDL have worked together to develop data standards applicable to the eConveyancing platform

Creating a Nationalised System

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The Platform

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PEXA supports the exchange of property through the ability to perform lodgements and property settlements online in a simple transaction. This includes: • New Mortgages

• Mortgage Discharges

• Refinancing

• Transfers

• Settlements

• Caveats

• Notices

Approximately 80% of all property transactions will supported by PEXA at Release 2 commencement.

About Property Exchange Australia

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Example of a Transfer using PEXA

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The Benefits

Stakeholder Group Primary reasons to convert to PEXA

Purchaser/Vendor • More transparent process • Time saving

Banks • Cost savings • Improved customer service • Opportunity to identify fraud earlier in the mortgage process • Removal of the largest demand driver for bank cheques

Lawyers/Conveyancers • Reduces time and cost of settlement • Time savings can be used to increase productivity • Greater client satisfaction

Land Registry Office • Current workforce would struggle to meet demand if transaction volumes increase to previous levels

• Time/cost saving in examining instruments

Office of State Revenue • Electronic platform to calculate and pay stamp duty

Intermediaries • Possibility to create new products to connect to PEXA

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Release Schedule

Release Functional Scope Target Participants Go Live

Release 1 Standalone Discharge

Standalone Mortgage

Refinance

Refinance Settlements

Select Land Registries

Select Financial

Institutions

Commenced

Release 2 Caveats and Notices

Transfers

Transfer Settlements

All Land Registries

All Financial Institutions

Solicitors/Conveyancers

Mid 2014

Q2 2013 Q3 2013

VIC

LTO

CBA

QLT

LTO

Other Banks

and NBFIs

Q4 2013 Mid 2014 Q1 2014

Practitioners and

Alignment Partners

2015

ANZ

Westpac

Bankwest

NAB

Release 1 Release 2

WA

LTO

NSW

LTO

TAS/SA/NT

LTO

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Paper vs Electronic

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Managing both the paper and the

electronic channel

There will always be some transactions that require completion through the paper channel

PEXA allows you to see whether the other parties to the transaction are on the system before opening a Workspace

For parties that are not on PEXA, an “inflight conversion” system is in place allowing practitioners to join PEXA and complete the transaction electronically

- Incentives will be put in place to support inflight conversion

Protocols are currently being established ensuring electronic invitations are either accepted or rejected within a set period

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An Update on Release 1

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Electronic Conveyancing National Law has been passed in four States with the remaining States to follow shortly

Contracts signed with 3 of the Major Banks as well as a number of Land Registries

Contract discussions with the remaining major and non-major banks are progressing well

PEXA Release 1 launched successfully in June with Land Victoria and the Commonwealth Bank

National Australia Bank launched successfully in September

New South Wales LPI are on track for October launch

eConveyancing National Progress

Update

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The Commonwealth Bank of Australia (CBA) became PEXA’s foundation Subscriber processing its first mortgage discharge with Land Victoria on 18 June 2013

CBA and NAB are now processing discharges and mortgages through PEXA

Processing times averaging 10 minutes

- Workspace Creation, Instrument Preparation, Signing, Lodgment and Registration

Time between lodgment and registration averaging 1 minute

Refinances to commence this month

- Coincide with the implementation of a protocol for invitation acceptance

Release 1 of PEXA

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Find Out More

Sign up for the PEXA update newsletters at www.necd.com.au:

Visit our website www.necd.com.au for more information including a list of Frequently Asked Questions

Email us at info@necd.com.au