The Australian Securities Exchange is backing a newly-formed electronic property settlements company as it eyes the $200 million industry.
The exchange operator will invest $30 million in Sympli Australia for a 50% stake. The other half of Sympli will be owned by Australian Technology Innovators (ATI), the parent company of InfoTrack which already provides eConveyancing technology and services.
Sympli will let parties prepare and lodge instruments (documents registered with Land Titles Office) and settle funds through an electronic lodgment network as they collaborate electronically and complete conveyancing transactions.
ASX expects Sympli to start operating by end of this year and to break-even in the 2021 financial year.
"Entering the electronic property settlement market is a natural evolution for ASX. We already settle approximately $70 billion in transactions electronically every day and have been the central settlement value for the Australian financial market for decades," ASX managing director and chief executive Dominic Stevens said.
"InfoTrack is the ideal partner as the market leader in legal and property search. It has 18 years' experience and brings a deep understanding of, and connectivity to, the property conveyancing industry."
ASX already has an electronic property financial settlement platform that was developed in 2007, in conjunction with the Victorian Land Exchange.
Sympli is currently waiting on approval from the regulator, the Australian Registrars' National Electronic Conveyancing Council (ARNECC) for its ELNO.
ASX's partner in the venture, ATI, owns the InfoTrack which is a top player in legal and property search and manual property settlements.
The 18-year-old InfoTrack is connected in property conveyancing and legal communities, while the ASX brings to the venture its expertise in operating high volume electronic settlement systems amid regulations as well as it's connectivity with the Reserve Bank of Australia.
ASX and ATI are getting two board seats each. InfoTrack's David Wills has been appointed as Sympli's chief executive.
Wills joined InfoTrack in 2017 as general manager of business development. He has spent 20 years in the financial industry, working at Lazard, Macquaire, Deloitte and CQS Management.
"David has extensive experience in the finance and advisory industries, deep expertise in regulated markets, thorough understanding of ELNOs and land registries, as well as a track record of building strong relationships with industry and government stakeholders," Sympli said in a statement.
ASX will seed Sympli will $7million in H1 FY18 as startup costs. The remaining $23 million would go in as working capital and further development of Sympli's platform.
The stock exchange operator will fund the investment from its operating cash flows.