Sticking points remain in battle to bust monopoly

E-CONVEYANCING challenger Sympli is worried the long-awaited rollout of interoperability could face further delay, as a major announcement by the industry regulator looms.

Australian Registrars’ National Electronic Conveyancing Council (ARNECC) in 2024 halted interoperability’s proposed rollout in the sector, dominated by digital platform PEXA.

Under the initiative, practitioners using an electronic lodgement network operator (ELNO) could complete transactions with entities on other platforms, boosting competition.

Many in the industry are said to support Sympli’s push to break PEXA’s market stranglehold.

Sympli CEO Philip Joyce said ARNECC had stated publicly it would communicate the next steps in the multi-year reform in March, making it “a critical period” for the sector.

“There’s a legislated obligation to implement this reform, it’s a policy decision that’s been embedded across bipartisan governments. We’re looking for ARNECC to announce the date for this to be delivered by the middle of next year,” Joyce told AC.

He was concerned about the path ahead given “a number of ARNECC statements keep referencing that there’s elements in this process that they need federal help for”.

“This shouldn’t be a hit the pause button and wait for a federal regulator to do something. There’s much that can be done while a regulator like the RBA can be engaged in parallel.”

Sympli, the only remaining challenger to PEXA in the $300 million settlement market after Lextech exited last year, has repeatedly called for industry reform.

Sympli argues that the overhaul, green-lit by government, is the only way to deliver true competition to tens of thousands of legal and conveyancing practitioners nationwide.

Without the revamp, a monopoly will be permanently entrenched in the market, it says.

PEXA CEO Russell Cohen said his company was “seeking a clear pathway forward for the e-conveyancing industry that improves outcomes” for customers, home buyers and sellers.

“In our view, interoperability is not the solution, and the Functional Requirements Review and Cost-Benefit Analysis support that position,” Cohen told AC in a statement.

“None of the interoperability models considered by these reviews are likely to improve customer outcomes.

“They are likely to incur a loss of existing functionality, degrade the practitioner experience and stifle innovation – all with significant implementation complexity.”

PEXA participated in more than 260 design workshops and invested more than $22 million in pursuing interoperability before ARNECC paused the program, he said.

“The evidence is now clear. Improving the existing national network is the best pathway forward. We look forward to ARNECC’s forthcoming statement and recommendations.”

The comments come as the sector awaits the findings of a NSW parliamentary inquiry into various market issues including outages, pricing, enforcement and interoperability.

Nearly all e-conveyancing transactions in NSW use PEXA’s exchange process, giving it an effective market monopoly in the state.

NSW Shooters, Fishers and Farmers MP Mark Banasiak, who is the inquiry’s deputy chair, said it was too early to speculate on outcomes.

However, Banasiak said evidence at the inquiry highlighted that interoperability carried significant implementation complexity and cost.

“The profession deserves clarity on whether those costs will translate into meaningful improvements in service, innovation and resilience rather than marginal price movements,” he told AC in a statement.

“One of the other central questions raised during the inquiry is whether interoperability would genuinely open the market or simply replace a monopoly with a duopoly.”

The real test for conveyancers, he said, would be whether “reforms enhance service quality and efficiency, not just change the market structure on paper”.

A separate federal parliamentary inquiry last year recommended that the Australian Competition and Consumer Commission (ACCC) probe the market.

 It also urged a review of reliability and resilience in the market in the event interoperability did not progress.

In Victoria, Australian Institute of Conveyancers state president Shakila Maclean said practitioners would likely be fast adopters of interoperability, if the system went ahead.

Maclean pointed to Victoria being one of the earliest adopters of electronic conveyancing, with transactions on the PEXA platform starting around 2014-15.

“While interoperability may be rolled out first in NSW and Queensland, I would like to think Victoria will be able to move quickly once the model is proven,” she said.

“(That’s) provided there is a clear national commitment from ARNECC to deliver genuine competition across the system.”

ARNECC and federal Assistant Minister for Competition and Treasury Andrew Leigh did not respond to requests for comment.