NPT RESOLUTIONS

For the full text of each Resolution, please refer to the records of each NPT meeting.

Resolutions by topic:

Consistent Business Practices
Licensed Service Providers
Client Identity Verification
Client Authorisation Agreement
Instrument Certification
Digital Signature Certificates
Mortgages
Chain Settlements
Fee Payments
Settlement Disbursements
Document Signing
Transaction Scope
Operational Roles
Transaction Assurance
Settlement Stopping
Practice Constraints
Document Repository
Data Supply


Consistent Business Practices
R1 (10/02/09) – There is to be more rather than less prescription of business practice requirements to maximize certainty of what is required of industry. Consideration of the extent of prescription in any instance will be required as part of the detailed implementation arrangements for each business practice. 

This resolution confirmed the importance of consistent business practices and established the principle of more rather than less prescription of requirements in the interests of maximising certainty and efficiency in the use of NECS.

Licensed Service Providers (LSP)
R2 (10/02/09) -  NECS is not to be given exclusive access to Land Registries for lodgment of electronic instruments and is not to receive title and other registry information from any Land Registry on more favourable terms than Licensed Information Brokers in the jurisdiction.  Subscribers are to be able to appoint an LSP as their payment agent to receive fee invoices from NECS and to make payments to NECS on behalf of Subscribers.

This resolution secured a level playing field for Licensed Information Brokers in those jurisdictions where they currently operate and provided a means for LSPs to continue to provide a fully integrated range of services to their customers as Subscribers to NECS.
 
Client Identity Verification (CIV)
R3 (10/02/09) – The CIV standard for NECS transactions is to be purpose-built to facilitate electronic property transactions based on current banking industry practice under Anti-Money Laundering (AML) legislation.

This resolution established the importance of CIV in NECS and acknowledged the need for a standard matched to the nature of property transactions and the desirability of basing the standard on existing industry practice and legislative requirements.

Client Authorisation Agreement (CA)
R4 (10/02/09) - Content of the draft CA Agreement proposed by the Land Registries accepted subject to review of the final wording prior to implementation, consistency in use with the finally agreed CIV arrangements, completion being possible without having to see the transacting party, and implementation with statutory backing.

This resolution enabled a prototype of the CA Agreement to be developed and it is now available for road-testing.

Instrument Certification (IC)
R5 (10/02/09) – Instrument Certifications proposed by the Land Registries accepted subject to review of the final wording of each certification statement prior to implementation.

This resolution accepted that certifications of correctness and compliance are to be included in the Participation Rules for using NECS and certifications of identity (ie of the transacting party having been identified to the CIV standard), of authority (ie of a CA having been obtained from the transacting party) and of support (ie all necessary supporting documentation having been obtained and scrutinised) are to be provided for when necessary on Registry Instruments.

Digital Signature Certificates (DSC)
R6 (10/02/09) – Organisation DSCs are to be used in NECS with specific responsibility on Subscribers to undertake CIV checks on Child certificate holders. 

Mortgages
R10 (12/05/09) - Mortgages in NECS are to be signed either by the mortgagee only, with the mortgagee certifying to having conducted CIV on the mortgagor and holding an authority from the mortgagor to lodge the mortgage, or by both the mortgagor and the mortgagee.

This resolution allows lenders to incorporate the mortgagor’s execution of the mortgage in their loan documentation and to sign the mortgage in NECS on the basis of their having the mortgagor’s execution of the mortgage available for production in the very small number of instances when enforcement is necessary.  Under this arrangement a mortgagor refinancing a mortgage will not have to engage a Subscriber to represent them in NECS, and a Subscriber representing a purchaser taking out a mortgage to complete a sale will not have to represent the purchaser as mortgagor.  The option of having the mortgage signed in NECS by both the mortgagee and the mortgagor will be available, however.

Chain Settlements
R8 (24/03/09 - Vendors are to be able commit cleared funds from a sale as a source of funds for a simultaneous purchase in another linked transaction.

This resolution enables sales and purchases by the same party to be completed together using funds from the sale to wholly or partly fund the purchase and avoid any need for bridging finance.

Fee Payments
R9 (24/03/09) - Fees in NECS are to be paid wherever possible in settlements and otherwise by direct debit or direct credit/B-Pay at the payee’s discretion. 

This resolution provides for fees payable to NECS and to Land Registries to be paid as settlement disbursements whenever a settlement is available and by either direct debit or direct credit/B-Pay when a settlement is not available, providing a balance between collection efficiency and user convenience.

Settlement Disbursements 
R11 (21/07/09) - Settlement disbursements in NECS are to be able to be paid in any of three ways.  They may be paid into a Trust Account from where they would be subsequently disbursed to the intended recipient.  They may be paid to the recipient’s pre-established account that had been confirmed as correct by the receiving financial institution.  Or they may be paid to the recipient’s account details nominated at the time.  In the last of these options, if the recipient arranges for their financial institution to confirm the account details prior to the settlement the funds will go straight to their account, if not they will be held by their financial institution and have to be claimed by the intended recipient.  Financial institutions are to be able to set limits below which payments are made directly to the recipient’s account without the account details having been confirmed by the financial institution.  In all instances where account details (BSB and Account Nos.) are entered into NECS they are to be entered twice.

This resolution is intended to limit the opportunities for error and fraud in making payments of cleared funds from settlements in NECS.  By having to enter account details twice, the chances of a transcription or fat-fingering error are reduced.  By having the receiving financial institution for a payment confirm the account details before payment, the opportunities for fraud are reduced.  These arrangements increase all parties confidence in using the electronic environment of NECS to complete transactions.

Document Signing
R12 (21/07/09) - Signed documents are to be invalidated by a Certifier changing a workspace data item contained in the signed document and all other signed documents containing the same workspace data item are to be automatically invalidated and system messages sent to each affected Subscriber.

This resolution defines the mechanism to be used when a detail of the transaction changes prior to settlement and documents already certified and signed need to be altered and re-signed.

R20 (8/12/09) - Signing in NECS is to always mean the application of a digital signature.  Certifications as to correctness and compliance are to be given in commitment to the Participation Rules, are to apply to all signed documents and are to be sufficient for Information Reports and Settlement Certifications.
Whether Information Reports need to be signed and whether they need to be signed by an industry practitioner is to be configurable when the document template for the Report is set up.  Settlement Certifications are to be signed in all instances but can be signed by a non-practitioner.

This resolution removes any doubt as to what signing means, confirms that Information Reports (such as Notices of Sale or Acquisition) do not need any special certifications and allows the parties ultimately relying on the data provided in Information Reports to decide whether they need to be signed and whether it is necessary for a legal practitioner or licensed conveyancer to sign them.

Transaction Scope
R13 (25/08/09) – The minimum transaction scope proposed by the Land Registries was accepted with purchasers’ caveats and withdrawals of caveats generally added.

This resolution set the minimum transaction scope in all jurisdictions as any combination of the following:

Discharge of Mortgage	Transfer of Ownership	New Mortgage	Caveat
Fee simple estate	Fee simple estate	Fee simple estate	Purchasers caveat
Whole of land	Whole of land	Whole of land	Withdrawal of any caveat
Multiple titles (without limit)	Multiple titles (without limit)	Multiple titles (without limit)	No supporting evidence required
Multiple mortgages (eg first, second, etc mortgages)	Multiple related transfers (transfers by direction)	Multiple mortgages (eg first, second, etc mortgages)
Multiple discharges (eg first and second, etc mortgages)	All registered proprietors involved as vendor	All registered proprietors or purchasers involved as mortgagor
Partial discharges (eg one title only)	Vendor holding as a sole proprietor, joint tenants or tenants-in-common	One incoming mortgagee per transaction
One outgoing mortgagee per transaction	Purchaser to hold as one only of sole proprietor, joint tenants or tenants-in-common	No supporting evidence required
No supporting evidence required	Monetary or non-monetary consideration
	No supporting evidence required

Jurisdictions may offer additional transaction types but they are all committed to providing this minimum transaction scope.  This scope covers approximately 75% of all transactions lodged with Land Registries today.

Operational Roles
R 14 (25/08/09 – Subscribers who are a conveyancing industry regulated legal or conveyancing practice representing an independent transacting party are to use delegated employees or legal practitioners or licensed conveyancers as Certifiers.

This resolution allows regulated legal and conveyancing practices to use supervised employees as Certifiers but does not stop them from using regulated legal practitioners or licensed conveyancers whether they are employees or contractors.

R15 (25/08/09) - Subscribers who are not a conveyancing industry regulated legal or conveyancing practice and are representing an independent transacting party are to use legal practitioners or licensed conveyancers as Certifiers.

This resolution ensures that unregulated businesses must use regulated practitioners as Certifiers, either as employees or contractors.  It gives all parties confidence that a regulated conveyancing practitioner must be involved in assuring the transaction is in order before Registry Instruments are certified and signed.

R18 (8/12/09) - Subscribers are to hold minimum levels of professional indemnity insurance and fidelity fund cover with the exception of financial institutions and government agencies.

This resolution ensures that all parties involved in completing transactions using NECS can be confident of recovering any losses resulting from a Subscriber’s negligence or dishonesty.

R 19 (8/12/09) - Subscribers representing themselves in transactions can use delegated employees, or legal practitioners or licensed conveyancers whether or not they are employees or contractors, or contractors (whether or not they are legal practitioners, licensed conveyancers or neither) who have been given a Power of Attorney by the Subscriber, as Certifiers. 

This resolution provides Subscribers who represent themselves in using NECS (most likely financial institutions as mortgagees) the flexibility to use supervised employees, contracted practitioners or appointed attorneys as Certifiers depending on whether their work is being done in-house or has been outsourced to a service contractor (such as a mortgage processor).

Transaction Assurance
R22 (25/08/09 - The operation of NECS is to include the following features:

• no restriction on when a workspace can be created
• mandatory population of workspaces with minimum Registry Information
• minimum Registry Information is to be the data content of a conventional title search
• workspace population with Registry Information is to occur when the jurisdiction and at least one title reference has been identified for the transaction, with the addition of further title references to cause additional Registry Information populations
• Registry Information to populate workspaces is to be supplied by the Land Registry
• supply of Registry Information is to be as XML data using the National Electronic Conveyancing Data Standard (NECDS)
• a Title Activity Check (TAC) service is to be available following supply of Registry Information to ensure refresh of Registry Information can be requested whenever a change has occurred on the Title Register
• the TAC is to be available as a schedulable alert service from the Land Registry for a finite period after last supply of Registry Information, and on request
• refresh of Registry Information after a TAC is to be optional
• validation  of the individual data items in workspaces is to be mandatory as each item is entered or changed and to also be available on request as a whole-of-workspace service
• verification  of a workspace by the Land Registry as its Registry Instruments being suitable for lodgment is to be available prior to the scheduled settlement time
• some changes only to a workspace after a successful verification of lodgment suitability are to negate that assurance
• if not requested earlier by a user, a verification of the workspace by the Land Registry is to be conducted by NECS at a set period prior to the scheduled settlement time
• each verification of a workspace by the Land Registry is to include a TAC
• each participating Subscriber is to be able to nominate whether they want settlement to proceed without a successful verification of the workspace by the Land Registry.

This resolution is to provide assurance to NECS users and transacting parties that their transaction can be safely completed.  It establishes the means by which users are made and kept fully aware of the state of the relevant Title Register and assured that the Registry Instruments will be accepted for lodgment.  It ensures users are made aware prior to settlement of any possibility of lodgment being refused and given an opportunity to correct the situation so that transaction completion is not delayed.  At the same time it allows users to determine how best to use NECS for transaction completion in the context of their existing and future business processes.

Settlement Stopping
R17 (20/10/09) – Stopping or re-scheduling settlements, or making changes to workspaces that invalidate signed documents, are to each have a prominent means of actioning, require the entering of a reason for the action, and require acknowledgment of the potential consequences before confirming the action.   An industry protocol is to be developed governing participants’ behaviour in stopping or re-scheduling settlements and dealing with the consequences.
This resolution ensures there is a prominent means of taking action when the circumstances of a transaction change, particularly when they change just prior to settlement time and there is a need to consider whether the transaction should proceed to completion.  It also ensures that actions that affect other users participating in a transaction are not taken lightly and the potential consequences are acknowledged before the action is completed.

Practice Constraints
R22 (8/12/09) - When the same Subscriber is representing both parties to a transfer, two different Certifiers are to be used to certify and sign the Registry Instrument counterparts.

This resolution is to minimise the opportunity for a single person using NECS to fraudulently transfer ownership of a property.  It may inconvenience some sole practitioners in rural and remote areas but on balance it is considered necessary in the electronic environment of NECS.

Document Repository
R23 (8/12/09) – The inclusion of document repository functionality in NECS is worthwhile, particularly if its use provides relief from statutory retention of original documentation, but its use is to be discretionary. 

This resolution recognises that a document repository associated with NECS will be a valuable additional service that is likely to expedite take-up of NECS in preference to existing transaction completion arrangements.

Data Supply
R24 (8/12/09) - Each data item in a NECS workspace is to be assigned an authoritative supplier to enable potential contention between user systems updating the data item to be readily resolved.  The authoritative supplier for each data item is to be determined in consultation with stakeholders, particularly the stakeholders relying on the accuracy of the data item.

This resolution is to ensure straight through processing of conveyancing transactions can occur in the majority of instances.  It provides a simple rule to resolve any contention between independent systems updating the same data item and avoid the need for human intervention.

Last updated:  18 December 2009

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