Digital property exchange platform PEXA have announced they have been formally approved by the Financial Conduct Authority (FCA) to become an Authorised Payment Institution (API); which in time will enable it to act as a Third Party Managed Account (TPMA) provider to conveyancers for Sale & Purchase transactions.
Since launching in the UK PEXA have made no secret of their efforts to build a sale and purchase offering having launched in remortgage and in 2022 completed the first fully digital remortgage when Hinckley & Rugby Building Society and conveyancing firm Muve orchestrated financial settlement directly from the incoming lender’s (RT) account, and lodging the application for registration with HM Land Registry through its system.
This approval marks another ‘milestone’ for the Australian company said UK CEO Joe Pepper.
“We know that change in the property market has to be earned, not imposed. Any innovation introduced to the market has to be done the right way, able to scale, and built to last. Receiving FCA approval provides additional assurance over our considered approach, and of the strength of the controls and systems we have put in place.
“As we build towards the launch of our Sale & Purchase solution later this year, this news should give our partners further confidence we operate responsibly with the highest standards of security and compliance as we help support the industry’s modernisation and growth. We’re here for the long-term, with security, stability, and partnership front of mind.
“This significant milestone will enable us to build further momentum in the UK, developing and deploying the trusted digital infrastructure to support the evolution of property transactions. We look forward to working even more closely with the conveyancing and lending industry as we do so.”
Alongside the development of PEXA Pay, the seventh net settlement payment scheme to clear through the Bank of England, FCA approval will enable PEXA to ‘facilitate c.70% of property transactions in England and Wales’ including remortgage; with plans to further develop coverage they say.
TPMAs have hit the headline in recent months following the Solicitors Regulation Authority’s consultation in to how client money is held by law firms. Removing client account altogether is one of a number of proposals under discussion including the possible use of TPMAs. Other options outlined in the consultation which ended in February are
- Time limits on the return of funds from client accounts; preventing firms from retaining interest earned
- Limits on monies put on account in anticipation of legal work
- The introduction of a central system like CARPA in France,
- Synchronisation of funds directly from one lender to another, although it is acknowledged this is specific to conveyancing rather than the whole of legal services.
In January PEXA said it has surpassed £100m of remortgage transactions through its portal since launch.
