Highlights

• IPART's draft report on the review of Electronic Lodgement Network Operator service fees proposes a reduction in PEXA Exchange's regulated revenue requirement of approximately 20% through cuts to certain transfer transaction fees over one year, equating to an estimated $70 million in revenue.

• PEXA will argue during consultation that phasing any price reduction over four years, rather than one, is critical to its ability to appropriately manage the business, with the draft remaining subject to public consultation before final recommendations go to ARNECC.

• Any changes to regulated ELNO service fees would not take effect before 1 July 2027 and would apply for a four-year period through to FY31, while PEXA's current MOR-based CPI fee cap continues to apply for FY27.

• PEXA Group shares fell 14.29%, or A$1.55, to A$9.30 on 3 July 2026 as the market priced the draft recommendation, with a public hearing scheduled for 21 July 2026 and final submissions due by 14 August 2026.

PEXA Group (ASX:PXA) shares fell 14.29%, or A$1.55, to A$9.30 in morning trade on 3 July 2026 after the Independent Pricing and Regulatory Tribunal of New South Wales released its draft report on the review of Electronic Lodgement Network Operator service fees. The draft proposes a reduction in PEXA Exchange's regulated revenue requirement of approximately 20%, delivered through reductions to certain transfer transaction fees over a single year, an amount the company estimates at $70 million in revenue. PEXA acknowledged the draft report and its supporting documents in an ASX announcement, confirming it will participate fully in the remaining stages of the review and will emphasise that phasing any price reduction over four years is critical to its ability to appropriately manage the business. The scale of the share price decline made PXA one of the most significant fallers on the exchange during the session.

A Sharp Share Price Repricing on Regulatory News

The 14.29% fall in PEXA shares to A$9.30 represents one of the sharpest single-session declines in the stock's history as a listed company and stands in contrast to the marginal moves seen across much of the broader market on the day. Regulatory determinations of this nature carry direct implications for the revenue base of a network operator whose platform processes 90% of all property transfer settlements in Australia, and the market's response reflects the mechanical translation of a proposed revenue reduction into forward earnings expectations.

The magnitude of the move also captures the difference between the draft's proposed implementation timeline and the company's preferred approach. A reduction of approximately 20% in the regulated revenue requirement compressed into a single year presents a materially different adjustment path than the same reduction phased over four years, and the gap between those two scenarios is now a central variable for the remainder of the consultation process.

What the IPART Draft Report Proposes

IPART's draft report addresses the fees charged by Electronic Lodgement Network Operators, the category of regulated entities that includes PEXA Exchange, the group's core Australian settlement platform. The draft proposes reducing PEXA Exchange's regulated revenue requirement by approximately 20% through reductions to certain transfer transaction fees over one year, which PEXA estimates equates to $70 million in revenue.

The recommendation is not final. The draft report remains subject to public consultation before IPART provides its final recommendations to the Australian Registrars' National Electronic Conveyancing Council, known as ARNECC, the intergovernmental body that oversees the regulatory framework for electronic conveyancing in Australia. The draft report has been published on IPART's website, and PEXA has directed stakeholders to the source document as part of its response.

Timing: No Change Before 1 July 2027

An important element of the announcement concerns timing. Any changes to regulated ELNO service fees would not take effect before 1 July 2027 and would then apply for a four-year period through to FY31. In the interim, PEXA's current fee arrangement, a CPI-based cap linked to the Maximum Opening Revenue framework, continues to apply for FY27.

This structure means the draft recommendation, even if adopted in its current form, does not alter PEXA's near-term regulated pricing. The financial effect, as proposed, would begin in FY28 and define the pricing environment through to FY31. For observers of the stock, the distinction matters: the share price reaction reflects a revision of expectations for that future regulatory period rather than any change to current period revenue.

PEXA's Position: The Case for Four-Year Phasing

PEXA's stated priority for the consultation phase is the pace of implementation. The company will be emphasising that phasing any price reduction over four years is critical to its ability to appropriately manage the business. A staged glide path would spread the revenue adjustment across the full regulatory period rather than concentrating it in the first year, affecting how the company manages costs, investment and planning across its operations.

The company framed its broader posture as constructive engagement, stating that it is committed to working through the implications of the draft recommendation and advocating on behalf of its people, its customers and the wider property settlement ecosystem. PEXA also confirmed it will participate in all remaining aspects of IPART's review.

Consultation Timetable and Investor Communications

IPART will commence its public consultation process following the release of the draft report. A public hearing is scheduled for Tuesday 21 July 2026 from 10.00am to 12.00 noon, and final submissions on the draft report are due by 14 August 2026, with both the hearing and the submission process open to all interested parties. The sequence from draft report to final recommendation to ARNECC will determine the fee framework that applies from FY28.

On the day of the announcement, PEXA scheduled an investor briefing for 9.30am AEST, with registration available via conference call and the script to be published on the company's website at 9.45am AEST. The release was authorised by the CEO and Group Managing Director of PEXA Group Limited, and the company provided investor and media contacts for follow-up.

Business Context: Scale of the Platform Under Review

PEXA describes itself as a world-leading digital property exchange business. Since 2013, the platform has facilitated more than 26 million property settlements, and today 90% of all property transfer settlements in Australia are processed on the PEXA platform. That market position is the backdrop to the regulatory review: fee-setting for an operator of this scale has consequences across the conveyancing industry, financial institutions and property market participants.

The group has also pursued international diversification, entering the United Kingdom digital refinancing market in 2022 and launching its Sale and Purchase capability in the UK in 2025. Those activities sit outside the scope of the IPART review, which concerns regulated ELNO service fees in the Australian market, though they form part of the wider revenue mix against which the proposed domestic fee reduction will be assessed by observers.

Conclusion

The IPART draft report introduces a defined regulatory variable into PEXA's outlook: a proposed reduction of approximately 20% in PEXA Exchange's regulated revenue requirement, estimated at $70 million, implemented over one year from no earlier than 1 July 2027 and applying through FY31. The 14.29% decline in the share price to A$9.30 on 3 July 2026 records the market's initial assessment of that proposal. The process, however, is not complete. The public hearing on 21 July 2026, the 14 August submission deadline and IPART's subsequent final recommendation to ARNECC will determine both the quantum and, critically, the phasing of any fee changes, with PEXA advocating for a four-year implementation path. The company's existing CPI-based fee cap remains in place for FY27, meaning the near-term revenue framework is unchanged while the consultation runs its course. The outcome of that consultation now stands as the key regulatory event on the company's calendar.

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