Financial Settlement is conducted in PEXA for transfer of property ownership or mortgage refinance scenarios. The source financial institution will transfer the funds to the destination or beneficiary financial institution, after the successful lodgement of property instruments with the Land Registry Office.
A Workspace is created in PEXA for every property transaction. Where financial settlement is required, the Workspace specifies the date and time of settlement and contains a Financial Settlement Schedule detailing where the funds are coming from and where the funds are going to.
The Settlement Schedule must balance, the source financial line items must be verified and all documents linked to the financial settlement must be signed by all Subscribers. If this does not occur (e.g. the Mortgagee on Title does not sign the Financial Settlement Statement), then the settlement cannot occur.
Changes to the settlement date triggers lodgement verification to confirm that the lodgement fees have not changed. Changes to the settlement time without a date change, does not trigger lodgement verification.
At the scheduled settlement date and time, the Workspace will be locked and the relevant documents submitted for lodgement. Once lodgement is successful, PEXA informs all the relevant financial institutions to disburse the funds from and to their nominated accounts as per the financial settlement schedule. When PEXA receives confirmation that the Financial Institutions can process the payments to the destination banks, PEXA considers the settlement complete. A notification is sent to all participants in the Workspace, informing them of successful settlement completion.
Financial Settlement Summary displays an overview of the financial details of the Workspace and allows you to view the difference between source and destination amounts.
Once the Subscriber has created the new Workspace, the financial settlement schedule details are entered, as per the example above. The Financial Settlement Schedule screen contains several tabs where you can select the Source and Destination tabs to enter account details and settlement amounts. The ability to enter source or destination line item information will depend on the role that the subscriber is participating in.
All documentation associated with the Financial Settlement Schedule (i.e. the financial settlement statement and lodgement documents) are digitally authorised by the Subscribers prior to settlement.
For Settlement to occur, the Workspace must hold the status of “Ready.”
A “Ready” status indicates that:
One hour before the scheduled settlement time, PEXA will automatically perform a Title Activity Check for all workspaces that are due to settle in the next hour. This is to ensure that there has been no activity on the title since the last Lodgement Verification. If activity is identified as a result of the TAC, a lodgement verification is performed. If there has been no activity on the title then the workspace remains in ‘Ready’.
For a positive TAC, all incoming parties must agree to continue with settlement, otherwise settlement will continually shift to the next 1.5 hour.
For more details on Title Activity Checks, please refer to Title Activity Checks.
When the scheduled settlement date and time arrives, PEXA automatically locks the Workspace and initiates the settlement process. No further changes are permitted during the settlement process.
Workspaces due for settlement that are not at the “Ready” status are rescheduled to the next settlement time i.e. one and a half hours from the current scheduled time, up to the end of the day day.
If settlement fails in the last settlement run of the day, PEXA automatically removes the settlement date and time from the settlement schedule which results in the automatic un-signing of the settlement statement for all Subscribers. In addition the Workspace and settlement status are updated to “In Preparation” and all Subscribers are notified of the settlement failure and the reason.
The Workspace is unlocked to allow participants to finalise details and reschedule settlement for another date and time.
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