A New South Wales parliamentary inquiry will examine competition in online property settlements in the wake of a series of technical issues at incumbent eConveyancing platform PEXA.
The inquiry, to be conducted by the Select Committee on Competition Reforms in Electronic Conveyancing, was approved by NSW Parliament this week following broad support from both the major and minor parties.
It is the second parliamentary inquiry now on foot across Australia, with federal Parliament expected to restart its inquiry into micro-competition opportunities in the wake of the election in April.
Pressure has been mounting on both state and federal governments to act on PEXA’s monopoly since the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) paused a key reform, dubbed the interoperability program, last year.
The program, which was “beyond the remit of states and territories to address effectively”, was designed to enable full compatibility and data interoperability with challenger electronic lodgement network operators (ELNOs) like Sympli.
Recent technical issues at PEXA resulting in delays to some settlements, and another ELNO, conveyancing service LEXTECH, exiting the market last month, have also thrust the issue back into the spotlight.
Independent MLC Taylor Martin, who will chair the committee, said there was “great risk in relying on a single provider”, noting that one of PEXA’s outages last month “impacted an estimated 400 homebuyers across the country”.
He said the inquiry would seek to understand where the interoperability program fell over and why ARNECC appeared to be taking a “go-slow” approach by “undertaking more reviews with no clear deadline”.
According to the terms of reference, the inquiry will also consider the impact of outages on property settlements, the enforcement powers available to the NSW Registrar General and the government’s commitment to delivering interoperability by December 2025.
“The bill was passed by the last parliament and was meant to enable competition in the market for homebuyers across Australia, particularly in NSW,” Mr Martin told parliament on Wednesday.
“What we have seen over the past two years is the development of a monopoly, instead of the competitive market we hoped for, and a government not responding fast enough to the problems being faced.”
Transport minister John Graham said that while the government would not oppose the motion, it would be the latest inquiry into eConveyancing in recent years and “likely to replicate what has occurred before”.
He added that the NSW Registrar General had directed both PEXA and Sympli to cooperate with the functional requirements review and cost-benefit analysis being led by ARNECC, but that the “states lack regulatory powers to resolve the concerns of banks about this reform”.
“Registrars may not be the appropriate authorities to oversee the bank or electronic lodgement network operator arrangements. NSW and ARNECC continue to engage with the Commonwealth for assistance and intervention.”
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