Consistent Business Practices

In April 2008, the National Office – on behalf of the NECS National Steering Committee – engaged law firm Clayton Utz to provide advice on the jurisdictions' business practice requirements for NECS in relation to Client Identity Verification (CIV), Client Authorisation (CA) and Instrument Certification (IC).

Specifically, advice was sought on what objective criteria should determine:
• the appropriate level of prescription of jurisdiction business practice requirements (eg. should business practice requirements be expressed as detailed prescriptive rules or as broadly worded standards)
• the most appropriate method of prescribing Land registry business practice requirements such as CIV, CA and IC
• the general period of validity of a CIV, CA and CI in the NECS environment.

In August 2008, Clayton Utz submitted a report proposing six criteria for jurisdictions prescribing business practice requirements in relation to NECS. In summary, business practice requirements should:

• maximise stakeholder confidence in NECS transactions
• impose clear and specific rules rather than broad standards
• be consistent with other regulatory/liability rules
• follow the least cost avoider principle in any allocation of liability
• only allocate responsibility for residual risk in accordance with the NECS Risk Management Framework
• be workable and economically viable for regulated persons (such as subscribers and certifiers) and their clients so that NECS is a cost-effective and attractive alternative to paper conveyancing.

For more information view the full NECS Report on Consistent Business Practice Issues.

Contact
Mark Sneddon
Clayton Utz Lawyers
Level 18, 333 Collins Street
Melbourne VIC 3000
Tel: +61 3 9286 6000
Email: msneddon@claytonutz.com
Website: www.claytonutz.com

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