The NSW Liberal government has been at the forefront of creating a regulatory environment that enables competition amongst e-settlement platforms. In February 2019, it produced a Directions Paper for a proposed eConveyancing interoperability regime. With the re-election of the NSW Liberal government, its efforts can continue.
The regulatory framework devised in NSW to encourage competition will likely be followed by other states and territories. The NSW government is also keeping an eye on anti-competitive behaviour and has decided that a set of competitive and consumer safeguards will be included in the Model Operating Requirements applying to ELNOs.
The hard question is how can two or more separately-owned e-settlement platforms co-exist? What will happen if one party to a transaction wants to use one platform and another party wants to use a different platform? Once the technical aspects of interoperability are resolved, then there is still the issue of which e-settlement platform in a transaction will be responsible for disbursing settlement funds amongst the parties?
The interoperability problem for property settlements has parallels in other industries. In the telecommunications sector for example, a Telstra customer can seamlessly have a telephone conversation with a customer of another carrier. In the financial services sector, competing banks have arrangements that make the payments system work.
Now that the NSW election is over, the regulatory work can continue to establish the competitive framework for property settlements.