eConveyancing Compliance and Enforcement Policy

1.1 Purpose

This policy provides a transparent framework for the use of the NSW Registrar General’s compliance and enforcement functions, pursuant to the Electronic Conveyancing National Law (ECNL) and Electronic Conveyancing Enforcement Act 2022 (NSW). The objectives of the policy are to:

• provide industry with clarity on the Registrar General’s enforcement functions
• provide transparency and promote consistency in the exercise of the Registrar General’s enforcement functions
• encourage compliance with and prevent contraventions of the eConveyancing regulatory framework.

1.2 Scope

This policy applies to the Registrar General and all officers, consultants, contractors and outsourced service providers engaged by the Registrar General.

1.3 Background

The Office of the Registrar General (ORG) is responsible for ensuring the integrity of the NSW land title system. The Registrar General oversees the electronic conveyancing (eConveyancing) framework in NSW and monitors participants’ compliance with legislative and regulatory requirements.

For more information see: About us | Registrar General (nsw.gov.au).

The ECNL was first implemented in New South Wales in 2012 as an Appendix to the Electronic Conveyancing (Adoption of National Law) Act 2012. Thereafter, the ECNL was implemented in other States and Territories as either application or corresponding legislation.

In November 2022, the Electronic Conveyancing Enforcement Act 2022 came into effect, giving the Registrar General a greater range of powers to enforce compliance by Electronic Lodgment Network Operators (ELNOs) with the ECNL.

The eConveyancing regulatory framework is made up of the four instruments set out in this section.

2.1 Electronic Conveyancing National Law (ECNL)

The ECNL is a national applied law scheme which governs the provision and operation of electronic conveyancing in Australia. Under the ECNL, a Registrar General can determine Operating Requirements that apply to Electronic Lodgment Network Operators (ELNOs) and Participation Rules that apply to Subscribers to an Electronic Lodgment Network (ELN). The Registrar General has certain powers under the ECNL to monitor and enforce compliance by ELNOs and Subscribers with the ECNL, such as undertaking a compliance examination or, in more serious circumstances, suspending or terminating an ELNO’s approval to provide eConveyancing services or a Subscriber’s access to and use of an Electronic Lodgment Network.

The Registrar General has been granted additional powers under the Electronic Conveyancing Enforcement Act 2022 to enforce compliance by ELNOs with the ECNL. These functions are detailed in section 5 below.

2.2 Operating Requirements

Section 18 of the ECNL requires that all ELNOs must comply with the Operating Requirements.

Operating Requirements are determined by the Registrar General under section 22 of the ECNL. These requirements govern the operational and compliance obligations of ELNOs, including the framework for subscriber registration and suspension. They are based on Model Operating Requirements, developed by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC).

The Operating Requirements impose obligations on ELNOs to support the Registrar General’s regulatory functions, including requirements to produce specified documents and information, and to comply with any reasonable direction of the Registrar General for the purpose of the Operating Requirements.

The NSW Operating Requirements can be found here: NSW Operating Requirements

The ARNECC Model Operating Requirements and guidance notes can be found here: Model Operating Requirements

2.3 Conditions of Approval

Section 16 of the ECNL authorises the Registrar to attach conditions to an ELNO’s approval to operate. Conditions of approval impose NSW-specific regulatory requirements on ELNOs, in addition to the Operating Requirements. In NSW there are both general conditions (applying to all ELNOs) and special conditions (applying to individual ELNOs).

The NSW conditions of approval can be found here: ELNO Conditions of Approval

2.4 Participation Rules

The Participation Rules outline the role and obligations of Subscribers to an Electronic Lodgment Network – primarily banks, lawyers and conveyancers. The NSW Participation Rules are determined by the Registrar General under section 23 of the ECNL and are based on Model Participation Rules developed by ARNECC – see: NSW Participation Rules

3.1 Regulatory principles

The following principles govern our work:

• Accountability: We hold ELNOs and Subscribers accountable under the eConveyancing regulatory framework and ourselves as regulator of that framework. This includes maintaining high standards of service and ensuring the effective and reliable operation of the land titles register and eConveyancing system.
• Proportionality: Our actions are proportionate to the risks and consequences of non-compliance. We balance regulatory oversight with the operational and commercial realities faced by our regulated entities, ensuring our responses are appropriate to the circumstances.
• Evidence-based: We base our decisions on robust evidence, including performance data, risk assessments, and any expert advice. This ensures our regulatory interventions are well-informed and justified.
• Outcomes-focused: We ensure our actions are directed towards achieving our regulatory outcomes. These outcomes include the ongoing integrity, security, performance and availability of the eConveyancing system in NSW.
• Transparency: We strive to be open and clear in our regulatory processes, decisions and expectations. This helps stakeholders to understand our approach and provides predictability in how we manage compliance and risks.
• Collaboration: We work closely with other government agencies and stakeholders to achieve our regulatory objectives. Collaborative efforts help us address complex risks and support the NSW eConveyancing system to operate effectively.
• Timeliness: We act promptly to address non-compliance and emerging risks, while recognising when issues require thorough investigation and consideration. Timely action ensures the continued availability and reliability of the eConveyancing system.
• Fairness: We make fair and impartial decisions. This ensures trust in the regulatory process and consistency in how obligations are enforced.
• Efficiency: We ensure decisions are made at the lowest appropriate level of authority, minimising unnecessary escalation while maintaining robust oversight and high standards of compliance.

3.2 Regulatory approach

3.2.1 Promoting compliance

To achieve our regulatory principles, our strategy is focused on encouraging compliance by ELNOs and Subscribers with the eConveyancing framework. We adopt proactive and preventative measures, such as:

• providing guidance on compliance to ELNOs and Subscribers through regular meetings and published guidance notes on the Model Operating Requirements and the Model Participation Rules
• providing practical and constructive information and education to ELNOs and Subscribers about their obligations and responsibilities
• maintaining strong regulatory relationships with each ELNO and Subscribers, and their representative bodies
• regularly engaging with key stakeholders such as NSW Land Registry Services (the operator of the land registry in NSW) and the peak bodies representing Subscribers and other stakeholders
• monitoring compliance through regular reporting, governance arrangements and ad hoc compliance checks as required.

Information about our enforcement powers can be found in section 5 below.

3.2.2 Enforcement pyramid

As described above, we support a culture of compliance in our regulated entities through education, engagement and monitoring.

The type of enforcement action taken will reflect the seriousness of the conduct and the circumstances surrounding the conduct, and will be informed by our regulatory principles. Our approach is outlined in the enforcement pyramid below.

Before making a decision on the enforcement action that we will pursue, we adopt the four-step enforcement process detailed in section 4 below.

Figure 1

The four steps below indicate the process that will typically be followed when making enforcement decisions relating to non-compliance by ELNOs. These steps are interdependent and overlapping. Some steps may occur concurrently, and a step may be revisited at a later stage in the process.

4.1 Step 1: Assessment

We may become aware of a potential contravention in a range of ways, including self-reporting by an ELNO, notification by stakeholders, or as a result of our monitoring and governance arrangements.

Once we are aware of a potential contravention, we may commence gathering information about the matter.

We request information from the ELNO concerned and provide the ELNO with an opportunity to explain their conduct and share relevant materials with us. The Registrar General has powers to require ELNOs to provide information to demonstrate their compliance and for other purposes relevant to eConveyancing.

The information that we gather will assist us in determining whether there has been a contravention, and if so, the enforcement action we may pursue (see Step 2 below). The type of information we may gather includes information concerning:

• the nature and seriousness of the contravention
• the impact caused by the contravention, including the risk to State assets and third parties
• whether the contravention is likely to continue or escalate
• the conduct of the ELNO, including whether the contravention was self-reported and the level of its cooperation with our inquiries
• any remedial steps taken by the ELNO
• the urgency of response required.

4.2 Step 2: Determine the enforcement action

We ensure that any enforcement action is proportionate to the seriousness of a contravention, as illustrated in our enforcement pyramid (Figure 1).

In determining the appropriate enforcement action, we will consider the circumstances of each case, including:

• the input received from the ELNO concerned and other impacted parties
• the seriousness of the contravention, including potential or actual impact on third parties and any risk to the security and integrity of the eConveyancing system
• the likelihood of the contravention continuing or escalating unless we intervene
• the compliance record of the ELNO
• whether the contravention is repeated
• mitigating factors, such as whether the contravention is isolated, or inadvertent
• whether the enforcement action is likely to deter further contraventions and improve behaviour
• the expected public benefit of the enforcement action
• whether the contravention is more effectively dealt with by another agency.

4.3 Step 3: Implement the enforcement action

Once we have determined the action to take, we will:

• give the ELNO an opportunity to be heard before finalising our decision
• make our decision in keeping with this policy and our regulatory principles
• communicate our decision, and the reasons for our decision, to the ELNO concerned, including providing information about any rights of appeal
• complete operational and procedural steps necessary to give effect to the decision
• if relevant, provide a reasonable time for the ELNO to comply with the decision
• ensure confidentiality and privacy of information where required by law
• maintain an open channel of communication with the ELNO

4.4 Step 4: Monitor

To ensure the enforcement action is complied with and is having the desired effect, we will monitor the action in accordance with our regulatory principles.

Monitoring activities may include:

• implementing a regular reporting cadence
• consulting with impacted stakeholders
• considering escalation options where relevant
• closing the case and informing the ELNO and stakeholders.

5.1 Mechanisms to encourage compliance

We monitor ELNO compliance with the ECNL and related regulatory framework through regular reporting and governance arrangements, as well as performing ad hoc compliance checks as needed.

Under section 33(a) of the ECNL, the Registrar General may undertake a compliance examination with respect to an ELNO to determine its compliance with the operating requirements or any suspected or alleged case of misconduct with respect to the operation of an ELN.

For more information see: Legal Framework

Other mechanisms include:

• without prejudice discussions with an ELNO
• informing the ELNO of issues and providing information to assist with compliance
• publicly reporting an ELNO’s compliance against service levels under its conditions of approval and performance levels under the Operating Requirements
• placing the ELNO on notice about the possibility of enforcement action should the conduct continue or recur
• referral of conduct to another appropriate regulatory body

5.2 Enforceable undertakings

Enforceable undertakings are made pursuant to Part 2, Division 1 of the Electronic Conveyancing Enforcement Act 2022.

An enforceable undertaking is a written undertaking under which the ELNO commits to specific measures to remedy a contravention, or mitigate against an identified risk of contravention, of:

• a provision of the ECNL
• a provision of the Operating Requirements
• a Condition of Approval.

An enforceable undertaking offers a tailored and flexible resolution of the issues that are of concern, and an opportunity for the ELNO to be involved in the resolution of a matter.

Due to their negotiated status, enforceable undertakings will be appropriate where an ELNO has acknowledged the actual or potential contravention, and the Registrar General is satisfied that the ELNO is committed to taking practical steps to remedy it.

An enforceable undertaking is unlikely to be appropriate in more contentious circumstances. For example, where the ELNO does not agree that there is an actual or potential contravention, or where the ELNO and Registrar General are not able to agree on practical remediation steps.

5.2.1 Process for making an enforceable undertaking

An enforceable undertaking is offered by the ELNO either upon request by the Registrar General, or at the ELNO’s own initiative.

The terms of the undertaking are negotiated in good faith between the Registrar General and the ELNO, and the undertaking becomes enforceable once the Registrar General provides written notice of acceptance of the undertaking, or on a later date specified by the Registrar General.

• The terms of an enforceable undertaking must clearly specify:
• the contravention (whether actual or potential) to which the undertaking relates
• the specific measures the ELNO has agreed to implement to remedy or prevent the contravention, and
• the timeframes for implementing the measures.

While an enforceable undertaking is in force, the Registrar General cannot take other enforcement action in relation to the same contravention.

5.2.2 Withdrawing or varying an enforceable undertaking

An ELNO which has made an enforceable undertaking may seek the Registrar General’s written agreement to, at any time, withdraw or vary the undertaking.

The provisions of an enforceable undertaking cannot be varied to provide for a different alleged contravention. In these cases, consideration of the appropriate enforcement action will commence anew.

An enforceable undertaking ceases to have effect if:

• it is withdrawn by the ELNO with the Registrar General’s written agreement, or
• the Registrar General withdraws acceptance of the undertaking.

5.2.3 What happens if an ELNO contravenes an enforceable undertaking

If the Registrar General reasonably believes an ELNO has contravened the terms of an enforceable undertaking, the Registrar General may apply to the Supreme Court for an order:

• directing the ELNO to comply with the undertaking, and/or
• discharging the undertaking or varying its terms, and
• requiring the ELNO to pay the Registrar General’s costs of both the proceedings and ongoing compliance monitoring, if appropriate.

5.3 Remedial directions

Remedial directions are made pursuant to Part 2, Division 2 of the Electronic Conveyancing Enforcement Act 2022.

A remedial direction is a binding written instruction issued by the Registrar General to an ELNO to implement specific measures to remedy an ELNO’s contravention of a requirement imposed by or under the ECNL.

As with an enforceable undertaking, the terms of the remedial direction must specify:

• the contravention to which the remedial direction relates
• the specific measures the ELNO must implement to remedy the contravention or prevent the contravention occurring again, and
• the timeframes for implementing the measures.

Unlike an enforceable undertaking, a remedial direction is neither voluntary nor negotiated. For this reason, remedial directions are appropriate in circumstances such as:

• where there is serious and reckless or deliberate non-compliance
• where there is a risk to the security of the land titles register, eConveyancing system or individual eConveyancing transactions
• where less coercive enforcement actions have not been effective

consistent with our proportionate approach identified in the enforcement pyramid (Figure 1).

5.3.1 Process for issuing a remedial direction

Before issuing a remedial direction, the Registrar General must provide written notice to the ELNO of the Registrar’s intention to issue the direction.

The ELNO has 14 days after the date of the notice to make submissions to the Registrar General, and the Registrar General must consider those submissions. This step ensures procedural fairness, allowing an ELNO to provide material to support their case against the issue of the direction, or seek changes to the terms.

The Registrar General cannot issue a remedial direction in relation to a contravention if:

• the ELNO has given an enforceable undertaking in relation to the contravention and the undertaking is in effect, or
• proceedings for an enforcement order in relation to the contravention have been commenced but not determined.

5.3.2 Revocation and appeal of a remedial direction

The Registrar General may revoke a remedial direction by giving written notice to the ELNO.

An ELNO can appeal against the Registrar General’s decision to issue a remedial direction to the Supreme Court of NSW, pursuant to Part 3, Division 4 of the ECNL.

5.3.3 Interim remedial directions in emergency situations

In an emergency situation, the Registrar General may issue an interim remedial direction which takes effect immediately and is not subject to the 14-day notice period.

An emergency situation exists where the Registrar General considers that the operation, security, integrity or stability of an ELN, the titles register, or the land titles system is jeopardised because of the contravention.

To ensure procedural fairness for ELNOs, an interim remedial direction can operate for a maximum of 21 days, after which it will lapse unless replaced by an ongoing remedial direction.

5.3.4 What happens if an ELNO contravenes a remedial direction

If an ELNO breaches a requirement of a remedial direction or interim remedial direction, the Registrar General may apply to the Supreme Court for an enforcement order pursuant to Part 2, Division 3 of the Electronic Conveyancing Enforcement Act 2022.

The court may make an order that the ELNO pay a financial penalty of up to $10,000,000 in addition to any other order the court considers appropriate.

Financial penalties are discussed in more detail under section 5.4, below.

5.4 Financial penalties

For certain types of contraventions by an ELNO, the Registrar General can apply to the Supreme Court seeking the imposition of a financial penalty (an enforcement order).

The Registrar General may seek an enforcement order if the Registrar General reasonably believes an ELNO has contravened:

• the obligation to establish and maintain interoperability pursuant to section 18A of the ECNL
• the obligation to cooperate with a compliance examination pursuant to section 34 of the ECNL
• a requirement of a remedial direction or an interim remedial direction.

If the court is satisfied the ELNO has contravened one of these provisions, the court may order that the ELNO pay to the State an amount not exceeding:

• for a contravention of the obligation to interoperate
  • $10,000,000, and
  • a further $250,000 for each day the contravention continues
• for a contravention of the obligation to cooperate with a compliance examination - $250,000
• for a contravention of a requirement of a remedial direction or an interim remedial direction— $10,000,000.

In addition to the above financial penalties, the court may make other orders it considers appropriate in the circumstances.

5.4.1 Considerations for determining the amount of financial penalty

In determining the amount of the financial penalty, the court must have regard to the following:

• the nature and extent of the contravention
• the nature and extent of loss or damage suffered as a result of the contravention, including by third parties
• the circumstances in which the contravention took place
• whether the contravention was intentional or unintentional
• whether the ELNO has previously contravened the enforcement provision to which the order relates
• the amount necessary to deter the ELNO from engaging in the contravening conduct in the future
• the damage the contravention has caused to the security or integrity of the land titles system.

More information on the interoperability reform can be found here: ELNO interoperability.

5.5 Suspension or revocation of an ELNO’s approval to provide and operate an Electronic Lodgment Network

5.5.1 Grounds for suspension or termination

The Registrar General may suspend an ELNO’s approval to provide and operate an ELN in NSW in specific circumstances outlined in the Operating Requirements and conditions of approval. These circumstances include an ELNO:

• committing a material breach of its obligations
• making a false or misleading representation
• being convicted of a criminal offence
• posing an ongoing threat to the integrity of the land titles register

An ELNO’s approval can be terminated if an ELNO is suspended and does not remedy the breach within a reasonable time, or if the ELNO has not commenced operating an ELN within two years of being approved.

5.5.2 Procedure for suspension or termination of an ELNO’s approval

Clause 2.1 of the general conditions of approval establish the procedure for suspension or revocation of an ELNO’s approval under the Operating Requirements or conditions of approval, including:

• notifying the ELNO of the grounds for the suspension or termination
• permitting the ELNO a reasonable period to:
  • provide written reasons as to why its approval should not be suspended or terminated
  • rectify and remediate any breach
• notifying the ELNO of the Registrar General’s decision to suspend or terminate, including providing reasons for the decision.

6.1 Registrar powers and Subscriber obligations

The Registrar General has the power under the Electronic Conveyancing National Law to undertake a compliance examination of a Subscriber to ascertain whether that Subscriber has complied with the Participation Rules, or to investigate any suspected or alleged case of misconduct by a Subscriber (including a former Subscriber).

A Subscriber must cooperate in a compliance examination and comply with any reasonable requirement by the person conducting the examination.

6.2 National Subscriber compliance examination procedure

The NSW Registrar General has adopted the national compliance examination procedure developed by ARNECC and known as the Subscriber Compliance Program.

Key objectives of the Subscriber Compliance Program are to:

• promote Subscribers’ compliance with their obligations under the Participation Rules
• provide education and guidance to Subscribers about their compliance obligations
• enable the Registrar to take appropriate action in the event of Subscriber non-compliance

That Subscriber Compliance Program is consistent with the requirements in the Model Participation Rules and adopted in the NSW Participation Rules. This includes:

• the Compliance Examination Procedure at Schedule 5
• Suspension Events, Termination Events and Suspension and Termination Procedure at Schedule 7, where applicable.

More information, including a link to the Model Participation Rules Guidance Note #6 Compliance Examinations and a Subscriber common errors form, can be found here:

Model Participation Rules Guidance Notes

Subscriber Compliance Guidance

6.3 NSW compliance examination steps and possible enforcement actions

In NSW, some steps in the Subscriber Compliance Program are undertaken by NSW Land Registry Services (NSW LRS), the private operator of the NSW land registry, on behalf of the Registrar General. An overview of the process is detailed below.

6.3.1 NSW LRS selects Subscribers to be the subject of a compliance examination

The Subscriber could be selected at random or targeted – a Subscriber may be targeted if they have been identified as higher risk for non-compliance (such as previous instances of non-compliance).

6.3.2 NSW LRS notifies the Subscriber of the compliance examination and requests the Subscriber to provide evidence of compliance with the Participation Rules.

A Subscriber will be asked to provide written details and supporting evidence that for a specific transaction they have complied with requirements relating to client authorisation, verification of identity and that they have taken steps to verify that their client or customer has the legal right and authority to deal with the property.

6.3.3 The Subscriber must provide requested information and documents within 10 business days

If the Subscriber does not provide the information as requested and after a further follow-up request, NSW LRS will refer the matter to the Registrar General.

The Registrar General will take further steps to obtain the information from the Subscriber – if the Subscriber still fails to provide the requested information, the Registrar General may suspend the Subscriber’s right to access and use the eConveyancing system.

6.3.4 NSW LRS reviews and assesses the evidence provided by the Subscriber

If the examiner finds the Subscriber has complied with their obligations, the examiner will record the result of the compliance examination and notify the Subscriber of the outcome.

If the examiner discovers deficiencies in the Subscriber’s evidence, the land registry may make recommendations about corrective action or may refer the matter to the Registrar General.

6.3.5 The Registrar General investigates non-compliance and considers appropriate enforcement action

NSW LRS may refer potential non-compliance to the Registrar General. If this occurs, the Registrar General will review the information and if the Subscriber is non-compliant, may make recommendations for corrective action(s) or, for serious breaches, initiate processes which may lead to the Subscriber being suspended, or in the most serious cases terminated, from accessing and using the eConveyancing system (see section 6.4 below).

6.4 Suspension or termination of a Subscriber’s access to and use of an Electronic Lodgment Network

6.4.1 Grounds for suspension or termination

The Registrar General may restrict or suspend a Subscriber’s access to or use of an Electronic Lodgment Network, or direct an ELNO to do so, in NSW in specific circumstances outlined in the Participation Rules. These circumstances include the Subscriber:

• committing a material breach of its obligations
• acting fraudulently or negligently in a way which may impact on a conveyancing transaction
• failing without reasonable excuse to comply with a compliance examination notice

A Subscriber’s access to an Electronic Lodgment Network can be terminated in specific circumstances outlined in the Participation Rules. These circumstances include that the Subscriber is:

• subject to an order or direction of a court, tribunal, professional regulatory or disciplinary body which may impact on a conveyancing transaction
• suspended and their access is not reinstated within a reasonable time following the suspension.

6.4.2 Procedure for suspension or termination of a Subscriber’s access and use of an Electronic Lodgment Network

Schedule 7 of the Participation Rules establishes the procedure for suspension or termination of a Subscriber’s access and use of an Electronic Lodgment Network, including:

• notifying the Subscriber of the grounds for the suspension or termination with reasons (Show Cause Notice)
• through the Show Cause Notice, requesting the Subscriber to show cause within 15 Business Days of the date of the Show Cause Notice why the Subscriber should not be suspended or terminated
• notifying the Subscriber of the Registrar General’s decision to suspend or terminate, including providing reasons for the decision.

For more information, see:

NSW Participation Rules

ARNECC Model Participation Rules

7.1 Laws and Guidelines

7.2 Definitions

7.3 Useful resources and related policies