From 1 November 2011, there will be new requirements in NSW for
mortgagees to identify mortgagors and new rules for witnessing most
Torrens Title dealings. These are two new separate and distinct
Identifying mortgagors - NSW
The mortgagee is obliged to take reasonable steps to verify the
identity of the mortgagor.
The regulations prescribe that a mortgagee can do this either
the steps set out in the regulations; or
complying with the mortgagee's AML/CTF procedures.
Records must be kept for a period of seven years.
The Registrar General can ask mortgagees to produce their
records for inspection.
The Registrar General may cancel a mortgage if the RG considers
a. the execution
involved fraud; and
b. the mortgagee
failed to comply with the identification requirements;
c. the mortgagee
had actual or constructive notice of the fraud.
A transferee of a mortgage is subject to the same restrictions
(ie there is a need to re-identify when there is a transfer or
mortgage registered – does not impact on equitable
These requirements are similar but not the same as the
Queensland requirements. However, identification under a
mortgagee's AML/CTF Program within a reasonable time of the
mortgage being signed should satisfy the identification
requirements in NSW and Queensland.
Qualification of witness - NSW
The requirements for witnessing documents are quite separate
from the requirement to identify mortgagors discussed in the last
Currently witnesses for real property dealings in NSW need only
be an adult of at least 18 years of age.
In addition to the requirement to identify
mortgagors described above, in respect of mostdealings (not just mortgages) dated on or after 1
November 2011, the witness must be an eligible
is at least 18 years old;
is not a party to the dealing;
has known the person for more than 12 months;
has taken reasonable steps to ensure the identity of that
Witnesses who follow the procedures set out in the regulations
will be deemed to have taken reasonable steps.
For completeness, we note that in Queensland witnesses must be a
prescribed 'witnessing officer'.
Action steps - NSW
AML/CTF identification of borrowers remains unchanged.
If all mortgagors have been identified by AML/CTF Procedures, so
long as the mortgage is signed within, say, two months, it will be
reasonable for a mortgagee to rely on that identification.
Mortgagees who do not have an AML/CTF Program should identify the
mortgagors using the procedures specified in the regulations.
Mortgages dated on or after 1 November 2011 must be witnessed by
an eligible witness. Appropriate instructions will
need to be sent with mortgage documents issued from mid September
2011. The NSW Land and Property Information office may amend
prescribed forms to provide information about the witness.
While the use of cash settled equity swaps is an established part of the Australian securities market, their use in recent high profile takeovers in Australia has attracted much attention. In particular, this attention has focused on the use of swaps by bidders or potential bidders in target companies without disclosure.
An AFSL is required if a person carries on a financial services business in Australia, unless an exemption applies.
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