Interoperability would allow the parties involved in settling a property transaction – lawyers, conveyancers and banks – to use any service provider, instead of having to use PEXA, which was originally a venture between Australia’s largest banks and various state governments.

In June, ARNECC effectively abandoned plans to introduce competition in the near-term after state government ministers said some of the intended reforms needed federal intervention. Electronic conveyancing is expected to generate fees totalling $430 million by 2025.

A NSW Productivity Commission report said that most of the $89 million in annual productivity benefits generated from Australia’s paper-based conveyancing system going electronic has been captured by PEXA making “above normal profits”.

PEXA had warned the regulator in July last year that it was now a public company and its assets were “no longer available for government bodies to disburse” without compensation.

“It is incorrect to make a blanket assumption that exchange of these additional data would not infringe PEXA IP rights,” the ASX-listed group said.

In response to queries about the IP threat, PEXA said: “We have consistently raised concerns with the industry regulator ARNECC and governments regarding the unintended consequences of the proposed approach to introducing interoperability.”

“PEXA remains committed to working constructively with regulators, industry participants, and governments to foster an ecosystem that benefits Australian home and property owners.”

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Banks contacted for this story declined to comment or referred queries to the ABA which said: “Banks support interoperability in principle, however, we have ongoing concerns with the current scope and governance of the project, which - if unresolved - will compromise its success.”

“We have expressed these concerns and continue to seek a government-led resolution.”

The federal government has declined to get involved in the matter. Federal Assistant Minister for Competition Andrew Leigh said the states have the power to legislate a timetable for reform that will introduce competition and back it with penalties if deadlines are not met.

The ACCC has also declined to get involved, saying ARNECC is the relevant regulator.

Meanwhile, analysts have embraced the reality that PEXA will remain a monopoly for the forseeable future.

“We reduce our market share loss assumption from 5 per cent to 0 per cent as we now assume econveyancing will remain a monopoly,” Macquarie Equities analysts said.

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