Key Highlights

  • PEXA Group Limited (ASX: PXA) used a 21 July 2026 IPART public hearing to formally push back on the tribunal's draft approach to pricing ELNO service fees.
  • PEXA states that IPART's proposed Initial Asset Base (IAB) is materially understated, and warns this could create an "unsustainable" financial profile if pursued beyond the current regulatory period.
  • PEXA argues the Building Block Model is inappropriate for capital-light digital infrastructure when compared with physical infrastructure.
  • PEXA wants IPART to revisit its approach to depreciation, the rate of return on historical expenditure and asset life, describing the current inputs as highly sensitive and contestable.
  • The IPART review is not yet final; PEXA's speaking notes are on its website and IPART has indicated a full hearing transcript will follow.

PEXA Group Limited (ASX: PXA) told an IPART public hearing on 21 July 2026 that the tribunal's draft pricing approach for Electronic Lodgement Network Operator fees is flawed and, if carried beyond the current period, could create an "unsustainable" financial profile. PEXA argues the proposed asset base is materially understated and urges a more cautious pricing recommendation. PEXA processes approximately 90% of all Australian property transfer settlements and has facilitated more than 26 million property settlements since 2013.

PEXA's Four Key Messages to IPART

PEXA distilled its submission to four core points: the Building Block Model is not appropriate for regulating digital infrastructure, which is capital light, compared with physical infrastructure; IPART's proposed Initial Asset Base is materially understated and, if pursued beyond the current regulatory period, will create an unsustainable financial profile; IPART's draft report is based on a flawed approach to setting the IAB, relying on highly sensitive and contestable inputs — in particular, IPART should revisit its approach to depreciation, the rate of return on historical expenditure and asset life; and PEXA encourages a more cautious approach to any pricing recommendation to avoid creating undue operational risk and unpredictable regulatory risk without evidence of commensurate customer benefit.

Every one of these characterisations — including the word "unsustainable" — is PEXA's own position advanced as a party to the review, not a finding by the tribunal.

Strategic Significance

For a business processing the overwhelming majority of Australian property transfer settlements, the economics of regulated service fees are central to its long-term earnings profile. PEXA's core argument is that a Building Block Model — traditionally applied to capital-intensive physical assets such as energy networks or water utilities — does not fit a capital-light digital platform. If the asset base against which returns are set is materially understated, the allowable revenue and fees the company can charge could be constrained in a way PEXA regards as unsustainable over time.

Investors should read the statement as PEXA defending the regulatory foundations of its domestic cash generation while it continues to invest in international growth, including its UK digital refinancing and Sale & Purchase operations. The company is signalling that it will contest the draft framework, but the ultimate outcome rests with IPART.

What Investors May Watch Next

  • Full hearing transcript expected on IPART's website in due course
  • IPART's move from draft report to final pricing recommendation or determination
  • PEXA's continued engagement with IPART over the current and future regulatory periods
  • Any disclosure by PEXA of financial modelling related to the regulatory outcome
  • Future ASX announcements

Risks

The submission reflects PEXA's advocacy as a party to the review. IPART may or may not adopt PEXA's arguments, and the tribunal's draft report reflects a different view. No final determination has been made.

PEXA itself describes depreciation, rate of return and asset life as highly sensitive and contestable — an acknowledgement that reasonable parties can reach different conclusions.

PEXA warns of undue operational risk and unpredictable regulatory risk, but does not quantify any earnings impact in the announcement. The release does not disclose the proposed IAB value, fee levels under consideration or any modelled financial effect.

Balanced Conclusion

The 21 July 2026 statement from PEXA Group Limited (ASX: PXA) is a clear, on-the-record intervention in a regulatory process that goes to the heart of its Australian business. PEXA's message is consistent and pointed: it regards IPART's Building Block Model and proposed Initial Asset Base as an ill fit for a capital-light digital platform. Equally, the announcement is advocacy within a live review — the tribunal has published a draft report reflecting a different view, and no final determination has been made. The next signposts — the hearing transcript and any move from draft report to final recommendation — will determine how much of this debate ultimately reaches PEXA's regulated economics.