As part of the new econveyancing system the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) has developed the ARNECC Participation Rules which require that participants in the electronic network must take “reasonable steps” to verify the identity of customers. The latest version of the Participation Rules has now been published and is expected to also eventually form the basis of identification in paper transactions in most jurisdictions as well.

Compliance with the Verification of Identity (VOI) Standard set out in Schedule 8 is deemed to be “reasonable steps” (or a “safe harbour”).

The essential requirement is that the verification of identity must be conducted during a face-to-face in-person interview between the Identity Verifier and the Person Being Identified.

A mortgagee can verify the identity of the mortgagor (by their own staff or through agents) or mortgagors may be separately represented.

But the mortgage documents need not be witnessed at the same time as the VOI is conducted provided the mortgagee is satisfied that the documents are signed by the person whose identity has been verified.

The amended Rules requires mortgagees to take reasonable steps to ensure that the person whose identity has been verified signed the mortgage document in lieu of requiring the signing to take place at the same time as the identity verification.

The amended Rules also allow regulated and insured mortgage brokers to apply the VoI Standard to mortgagors as agents of the mortgagee and satisfy the requirements for the verification to be deemed reasonable steps.

Mortgagees can align these procedures with their current AML/CTF procedures for customer identification.