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
Further Transaction Assurance Matters
Digital Signature Safekeeping
Data Visibility
Workspace Linking
Non-Functional Requirements
Deposit Moneys
Settlement Preparation
Non-Subscriber Participation
Third Party Notifications

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. 

Mortgage Counterparts 
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 on seperate counterparts 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.

R32 (20/4/10) - It was further resolved that vendor disbursements not confirmed by the receiving financial institution prior to settlement be paid into the vendor’s Subscriber’s Trust Account instead of a suspense account at the receiving financial institution


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
R14 (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.

R19 (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).

R33 (18/5/10) – All Representative Subscribers, ie Subscribers representing a transacting party, are to be regulated as legal or conveyancing practices.  This is to apply to mortgage processors representing financial institutions or non-bank lenders as mortgagees.  This resolution overcomes the doubt about whether mortgage processing generally and providing instrument certifications in NECS is legal work and ensures that insurance policies are not unenforceable because of an unregulated Subscriber having undertaken unlawful work.  As a consequence of this resolution, all Subscribers representing transacting parties will be able to rely on Client Authorisation Agreements for their authority to sign instruments on behalf of transacting parties.


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
R23 (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
R24 (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
R25 (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.

Further Transaction Assurance Matters
R26 (9/2/10)

Duplicate Workspaces – existence of other workspaces for the same title reference(s) is to be made known to creators of new workspaces in all instances with the information made available of existing workspaces to be the workspace number and the creating Subscriber.  In reaching this resolution, it was recognised that access to duplicate workspaces (and the nature of the transaction and the identity of its transacting parties) would only be possible if the Subscriber was the creating Subscriber or already had access to the workspace, or the Subscriber to whom the existence of the duplicate workspace was revealed was subsequently invited to participate in the transaction.

Indirect Registry Information Supply – indirect supply is to be provided for on the understanding that it is to be made available to Subscribers as Land Registries and Information Brokers become capable of servicing it.  Registry Information products are to include means of authenticating origin and purchaser before being acceptable for indirect supply to NECS.  In the meantime, Registry Information for NECS is to be sourced directly from the Land Registry.

Workspace Changes Negating a Lodgment Acceptability Assurance (LAA) – addition of a Registry Instrument, change to a data item necessary to populate a Registry Instrument and change to Lodgment Fee liability, invoicing or payment are to negate a LAA previously provided to NECS by the Land Registry.

This resolution prompted the Revenue Offices to recognise that they will have to think about what workspace changes will negate a Duty Assessment Assurance previously provided to NECS by the Revenue Office.

Positive Title Activity Check (TAC) During Workspace Verification Conditioning a LAA – a positive TAC, either during a Workspace Verification or after a Workspace Verification has given NECS a LAA, is to prevent the transaction being settled and/or lodged until all parties have acknowledged the TAC result and cleared the transaction to proceed.  Such clearances to be able to be pre-set by Subscribers irrespective of the TAC result or provided on an instance-by-instance basis.

Positive TAC Conditioning a LAA – as for a positive TAC during Workspace Verification (see above), the transaction is to be prevented from being settled and/or lodged until all parties have acknowledged the TAC result and cleared the transaction to proceed, either through a pre-set preference or on an instance-by-instance basis.

TAC Implementation – NECS is to provide, by polling the Land Registry, three TACs during the lifetime of a workspace - one a week before settlement, one a day before settlement and one an hour before settlement.  These automated TACs are to be able to be supplemented at any time by Subscriber-requested TACs.

Registry Information Product – the product is to consist of the XML data content of a conventional title search, a conventional title search as standard or a purchase option, end-user customer and origin authentication using digital signatures for indirect supply to NECS, conformance with the National Electronic Conveyancing Data Standard (NECDS), and a uniform number or duration of TACs.

Digital Signature Safekeeping
R27 (16/3/10) - The use of USB tokens to store digital signatures is to be optional, second factor authentication of digital signature holders is to be required when signing-on, there is to be a reasonable practice requirement in the Participation Rules for the safekeeping of USB tokens and the protection of user systems from virus infection and hacker intrusion, and guidelines are to be issued periodically on the contemporary best practices that constitute reasonable safekeeping of USB tokens and protection of user systems.

Data Visibility
R28 (16/3/10) - Data intended for inclusion in Registry Instruments is to be visible to all workspace participants, with the exception of payee personal and financial account data needing to be confirmed by a receiving financial institution, all other personal or financial information not included in Registry Instruments is to be visible to the Authoritative Supplier only, payee personal and financial account data needing to be confirmed by a receiving financial institution is to be visible to that financial institution only, and signed Information Reports and Settlement Certifications containing restricted visibility data are to be rendered on demand for viewing and/or downloading with the restricted information redacted for those workspace participants not entitled to see the information.

R34 (18/5/10) – Payee name and amount details for each vendor disbursement (ie a disbursement to the vendor or to a nominee of the vendor excluding outgoing mortgagees and government agencies and utilities) are to be visible to incoming mortgagees both within the workspace that the incoming mortgagee is participating and any within any dependent workspace linked to that workspace for simultaneous settlement.  This resolution ensures an existing mitigation measure against mortgage fraud remains available to incoming mortgagees.

Workspace Linking
R29 (20/4/10) - Linking of workspaces is to be possible for simultaneous settlement, concurrent registration or sequential registration, linking (and unlinking) is to be initiated from the ‘parent’ workspace and confirmed from the dependent “child” workspace, no limits are to be placed on the number of workspaces that can be linked, and workspaces linked for sequential registration are to be subject to transaction assurance as a chain.

Non-Functional Requirements
R30 (20/4/10) - Forty-four specific non-functional requirements largely derived from the Australian Standard for software engineering quality AS9126:2005 and covering system security, reliability, useability, efficiency, maintainability and portability.

Deposit Moneys
R31 (20/4/10) - Cash deposits are to be able to be committed to a settlement at the discretion of the parties and in the same manner as all other sources of external settlement funding, preferably under an appropriate industry protocol for their release and commitment to settlements.

Settlement Preparation
R35 (18/5/10) – Settlement transaction workspaces are to include an Adjustments Calculator capable of handling the various adjustments made between vendor and purchaser with the net adjustment transferred to the Settlement Schedule.  In the event of any change to the scheduled settlement date for the transaction the Adjustments Calculator is to automatically recalculate the net adjustment and update the Settlement Schedule.  Use of the Adjustments Calculator is to be optional, with it being possible for a net adjustment amount calculated externally to be directly inserted into the Settlement Schedule. 

Settlement Schedules are to be balanced automatically by default but be also capable of being balanced manually.  When balancing automatically, the balancing item is to be the vendor disbursement by default with capability for another vendor disbursement to be nominated as the automatic balancing item.

Settlement Certifications are to be required for each discrete source and disbursement of funds in the Settlement Schedule.  Sources of funds are to be certified as being available cleared at the time of settlement by an Exchange settlement account holder at the RBA.  Disbursements of funds are to be certified by or on behalf of the outgoing mortgagee, vendor or purchaser as appropriate.  All required Settlement Certifications must be in place before the scheduled settlement time.

Settlement Certifications of cleared funds availability for a settlement are to be a guarantee of funding at the scheduled settlement time and not a certification of the funds being available at the time of certification.

Non-Subscriber Participation
R36 (18/5/10) – All workspace participants are to be Subscribers (or the employees of Subscribers), including the financial institutions certifying cleared funds availability and/or confirming payee account details for vendor disbursements when those financial institutions have no other role in the transaction.  This resolution is a necessary fraud protection against mis-appropriation of funds.

Third Party Notifications
R37 (18/5/10) – Standard-text messages with system-inserted variables and linked to a specific workspace event are to be available for optional use by workspace participants.

Last updated: 21 May 2010 

Back to top