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Issue 40 October 2009 |
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Welcome to NECSpress, the e-newsletter for the National Electronic Conveyancing System.
In this Issue :
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In response to your feedback we have enhanced our website. It now provides a clearer structure with simplified navigation so that you can locate the information you want about NECS more easily.
You can find out what is happening by keeping an eye on the Latest News section. It will be updated regularly as the development of NECS progresses.
One significant enhancement to the website is the location of all National Office publications in one place. This will make them easier to find and the addition of the NECS Glossary will help with understanding them.
Check out our new website at: http://www.necs.gov.au. As always, your feedback is welcome
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Since our last NECSpress, there have been further workshops in Adelaide, Perth and Hobart. Once again they generated great interest with over 200 people attending. This puts total attendance so far at over 500 with the trend set to continue. There are close to 100 registrations for the Darwin and Canberra sessions on 8 and 16 October respectively. You can still register for the two remaining workshops by sending an email to info@necs.gov.au.
The overwhelming sentiment at the workshops has been enthusiasm for the introduction of NECS. It is clear that all around the country a significant amount of thought is being put into how to best prepare for the arrival of NECS and how to maximise the benefits it will deliver.
Over 100 stakeholders participating in the Brisbane workshop
The presentation used at the workshops and an audio of one of the sessions are available our website.
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As well as the issues mentioned in our last NECSpress, the workshops have also covered Instrument Certification, Digital Signatures and Settlement Disbursements. These are key components in making NECS a reliable, secure and trusted way of completing conveyancing transactions conveniently and efficiently. The National Project Team papers on these and other issues are available on our website along with convenient feedback forms. The NPT members are keen to hear what every practitioner and other industry participant thinks about these issues, so let them know by getting your feedback in
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Independent Instrument Certifications
In the NECS environment, registry instruments will be certified on behalf of the transacting parties. Certification involves making representations to the other participants in the transaction and to the Land Registry where the instruments will be lodged. Land Registries and the other participants in the transaction need to be assured by a Certifier that all relevant business practices have been properly undertaken, that the information included in the instruments is correct and that the instrument complies with all legal requirements. This is critical to maintaining participant and community confidence in the system.
There will be a total of five certifications to be given depending upon the circumstances of the transaction. Two will be incorporated in the Participation Rules which all Subscribers and Certifiers must agree with before being able to use NECS. The other three will be set out on the instruments being signed.
The two certifications to be provided for in the Participation Rules will apply to all instruments and are certifications of the -
• correctness of all information in the instrument
• compliance of the instrument with all legal requirements.
The three certifications to be provided for on each instrument when applicable at the time of signing are certifications of -
• a Client Identity Verification of each transacting party having been properly conducted
• a properly completed and signed Client Authorisation from each transacting party having
been obtained
• all Supporting Evidence required for the instrument having been obtained, scrutinised and
securely retained.
These certifications provide independent evidence to all relying parties of the relevant prescribed business practices having been fully and properly undertaken prior to settlement and/or lodgment.
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Reliable Digital Signatures
Electronic registry instruments and other documents are to be signed digitally in NECS. Each person entitled to sign documents will be required to obtain a Digital Signature Certificate (DSC). Use of the DSC identifies the person signing, ensures the security of the document from changes after signing and prevents the signing from being subsequently repudiated. These assurances are necessary in the electronic environment of NECS to give all participants and their transacting parties, as well as relying parties such as Land Registries, confidence in the signings.
The DSC's to be used are those issued by commercial suppliers accredited under the Commonwealth Government’s Gatekeeper scheme. You can read about Gatekeeper here .
Each Subscriber to NECS will obtain a first DSC for their organisation and then the holder, using that DSC, will authorize the issue of further DSC’s to the Subscriber’s employees and Certifiers. The first DSC issued to the Subscriber is to require an independent verification of the recipient’s identity and subsequent DSC's issued on the authority of the first DSC holder is to require the recipient’s identity to be verified by the Subscriber. These arrangements ensure that every user of a DSC has had their identity verified to a prescribed standard and that the Subscriber accepts liability for the consequences of every digital signing in NECS by one of its DSC's. They give all transacting parties, system users, relying parties and the community generally confidence in NECS.
More general information on DSC's and digital signing is available here
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Safe Settlement Disbursements
Financial settlements in NECS will involve electronic transfers of cleared funds. Because settlement is fast and made with cleared funds, it is critical that disbursement payments end up in the right accounts. For disbursement payments to financial institutions, government agencies and even NECS, this is not a problem as the account details (BSB No. & Account No.) are known in advance and can be pre-set in NECS and verified before first use in a settlement.
However, when disbursement payments are to be made to the vendor or a nominee of the vendor whose identity and account details only become known during the transaction, special precautions are necessary to ensure the funds go to the right accounts. A slip keying in account details could mean that an unrelated party gets a sudden deposit of substantial cleared funds in their account. This risk has been identified as a major concern for many industry practitioners and a disincentive to use electronic conveyancing.
The way this risk is to be dealt with is that the Subscriber arranging the disbursement payment on behalf of their client is to have a number of options. They will be able to choose between:
• paying the funds into a pre-set Trust Account from which they can pay the recipient
subsequently by cheque or electronic funds transfer
• setting up the recipient’s account details in advance and ensuring their correctness before
using them in a settlement
• having the recipient’s financial institution confirm the account details prior to settlement.
The first of these options might suit when delayed receipt of the funds is not important. The second option might suit when the recipient is a regular client of the Subscriber and likely to be frequently receiving disbursement payments from NECS settlements.
The third option is the one likely to be used most often. The recipient will be required to contact their financial institution, be identified as the financial institution’s customer and advise the financial institution of the pending settlement. The financial institution will enter NECS and confirm the account details entered by the Subscriber so that at settlement the payment can be confidently made directly into the financial institution’s customer’s account. In the event that the receiving financial institution does not confirm their customer’s account details prior to settlement, the funds will be paid into a suspense account at the financial institution from where the intended recipient can claim them after being successfully identified by the financial institution as the account holder.
These arrangements will provide all users with the means for ensuring settlement disbursements end up in the right account and transacting parties with confidence that their money won’t end up in someone else’s account for an unscrupulous person to make off with.
If you have a Hot Topic you would like to know more about, please tell us by email to info@necs.gov.au.
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Want to know more?
Please check out the NECS website http://www.necs.gov.au or email us info@necs.gov.au if you would like more information
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