Mortgage industry participants have welcomed the finalisation of verification of identity rules that will apply in the national electronic conveyancing system.The Australian Registrars National Electronic Conveyancing Council has finalised Version 3 of the Model Participation Rules for the operation of e-conveyancing.ARNECC was set up in 2011 to co-ordinate a national approach to e-conveyancing. Its members are the land title registrars from each state and territory.The new verification of identity rules apply to electronic transactions on the PEXA exchange and also to paper dealings in New South Wales, Victoria, South Australia, Queensland and Western Australia, with a starting date likely to be in November.To meet the safe harbour requirement for verification of identity, subscribers and identity agents will have to verify customers involved in land dealings face to face.A number of contentious items in early drafts have been modified.ARNECC had proposed that verification was to be carried out at the same time as the witnessing of registry documents (such as mortgages). This proposal has been dropped.Instead, mortgagees must be satisfied that the documents are signed by the person identified in the verification process.ARNECC had also proposed that identity agents, including mortgage brokers, must have a minimum of A$20 million of professional indemnity insurance in order to be considered within the safe harbour provisions.In the final version mortgage brokers can conduct verification of identity as agents of mortgagees as long as they hold professional indemnity and fidelity insurance, or professional indemnity insurance that provides coverage for third party claims arising from dishonest and fraudulent acts.Gadens partner Jon Denovan said that under earlier drafts it was not clear whether mortgagees were liable for the conduct of their agents. Denovan said: "It is now clear that subscribers and mortgagees are liable for the conduct of their identity agents."ARNECC has removed a section that specified procedures for the verification of people located overseas. Denovan said ARNECC recognised the need for flexibility in this area and removed the procedures.Specialist face to face customer identification specialist ZipID said in a statement that the rules were a "milestone towards harmonising and digitising land dealings across Australia".Denovan said some of the changes were "a great relief for the mortgage industry."