PEXA wins the Sympli battle — but now could lose the pricing regulation war
Just a day after the market thought PEXA had defeated a near decade long war to force it to face competition in the electronic conveyancing sector, a new regulatory challenge emerged.
On the same day that dominant property settlement platform PEXA effectively bid farewell to a decade long effort to force it to face competition, a NSW regulator drastically ramped up pressure on the ASX-listed company’s margins and tanked its stock.
While both announcements were made on Tuesday, it wasn’t until UBS analysts picked up the Independent Pricing and Regulatory Tribunal’s (IPART) price crackdown and slashed its target price that the dominant electronic conveyancer’s stock fell nearly 15%.
In its proposed methodology for calculating an efficient regulated price IPART said “we do not expect competition to be effective in shaping ELNO [electronic lodgement network operator] service fees within the next few years”, according to the consultation paper.
Only the cost base methodology has been released. Considerations of forward-looking operating and capital expenditure will be detailed separately.
