PEXA Group Limited (ASX:PXA) operates a digital property exchange that processes approximately 90% of property transfer settlements in Australia. The company is currently navigating a regulatory review of Electronic Lodgment Network Operator service fees by the Independent Pricing and Regulatory Tribunal of New South Wales, creating uncertainty around future pricing for its Australian Exchange business.

How PEXA Came to Dominate

PEXA has facilitated more than 28 million property settlements and established broad coverage across Australia. Its market coverage remained at approximately 90% in FY2026, with the company serving customers in every Australian state and territory.

Competition in electronic conveyancing has also been shaped by developments around interoperability. In March 2026, the Australian Registrars’ National Electronic Conveyancing Council confirmed that the eConveyancing interoperability program would not proceed at that time following consideration of independent functional and cost-benefit reviews.

The Pricing Review

In July 2026, IPART released its draft report on ELNO service fees. The draft proposed an approximately 20% reduction in PEXA Exchange’s regulated Revenue requirement through reductions to certain transfer transaction fees. PEXA estimated that this would equate to approximately $70 million in revenue.

PEXA has challenged aspects of IPART’s proposed methodology. At the July public hearing, the company argued that the Building Block Model was not appropriate for a capital-light digital infrastructure Business and said the proposed initial asset base was materially understated. It also called for a more cautious approach to any pricing recommendation.

The company has also argued that any price reduction should be phased over four years rather than implemented over one year. Importantly, PEXA has stated that changes to regulated ELNO service fees would not take effect before 1 July 2027, with its existing CPI-linked fee cap continuing through FY2027.

What the Review Means for PEXA

The review is relevant because the Australian Exchange remains a major contributor to PEXA’s financial performance. In FY2026, the Australian business generated revenue of $345.6 million and EBITDA of $192.8 million, with transaction volumes of 4.7 million.

PEXA’s FY2026 results reiterated that IPART’s draft proposal envisaged a 20% reduction in regulated revenue from FY2028, followed by CPI increases. The company continues to engage with the regulator and has raised concerns about the methodology and assumptions underlying the draft recommendations.

The regulatory process is not yet complete. IPART is considering stakeholder submissions and now expects to deliver its final report to the NSW Minister by 30 October 2026. The report will then form part of the broader regulatory process concerning ELNO service fees.

PEXA is also pursuing other areas of growth. Its FY2027 strategy includes strengthening the Australian Exchange, developing PEXA Clear, undertaking a capital-light New Zealand pilot and increasing adoption of its UK platform. The company has also delivered NatWest’s digital remortgage capability in the UK and plans to progress Sale and Purchase capability.

The immediate issue remains the final outcome of the IPART review and how any changes to regulated fees are ultimately implemented. Until that process is completed, the extent of the impact on PEXA’s Australian Exchange revenue and margins remains uncertain.