XML is new to many organisations in the Lending Industry. On the other hand, several LIXI Members have considerable background with XML design, development and implementation. Being part of the LIXI group is an excellent way to keep in touch with this extremely fast moving technology and how it is being used in the Lending Industry.
Being a Member of LIXI means the ability to participate in the standards development process. All Members have a voice and this guarantees the opportunity to positively influence lending standards development outcomes.
It is the objective of LIXI to make all information freely available to the public, however it will be common for most initiatives to have a gestation period of several months with more ambitious goals requiring longer periods. For Members of LIXI working on XML implementations, the ability to actively observe and prototype evolving standards could prove invaluable in reducing time to market and in reducing the cost of building compatible systems.
Members of LIXI represent brokers, lenders, mortgage securers and insurers as well as some statutory bodies as members and active observers.
As LIXI extends CAL throughout the lending chain, consumers will find the settlement process becomes faster and easier as valuers, mortgage insurers and settlement agents exchange data online. Another benefit will be increased competition in the mortgage market; consumers will be able to submit their information once to apply for loans from a range of lenders and brokers without reentering information or providing additional details. This will help brokers 'shop' for the best deal for their clients easily.
Your application will be processed by LIXI Ltd and a decision regarding your membership application will be communicated to you within 30 days. If your membership application is successful, you will be required to forward any due monies within 30 days of the notification. Failure to do so will nullify the decision, and you will have to apply again for membership. LIXI Ltd reserves the right to decline membership applications without disclosing the declinal reason.
LIXI recommends that industry participants take up a membership, regardless of if only a licence is required, in order to gain access the networking advantages that LIXI membership offers.
LIXI fees are renewable annually.
This licence class has been developed specifically for the four major lenders, ANZ, CBA, Westpac and NAB and will include, as Authorized Users to the license, the subordinate companies and business partners of the major lenders. This license class was developed in order to address and simplify the major lender organisations paying multiple license fees for multiple companies.
The North American standard has been established based on the US Mortgage Market which has differences to the Australian market in regards to language used and descriptions. For example, in Australia, the US term Alimony Child Support is referred to as Family Maintanance. In the future there is no reason why the US DTD cannot be mapped to the Australian Terms and Australian processes, however, it is not considered a current priority.
In the meantime, LIXI will not use the rights in clause 7.2 for any other purpose than to implement changes to the licensing regime.
The current membership and licensing regime was developed after a year of extensive consultation with Members and industry participants. The key drivers behind the licensing policy are as follows:
- To protect LIXI's core intellectual property. Ensuring that LIXI has the ability to protect and enforce the IP in the Standards
- To broaden the membership base. By separating licensing from membership, LIXI is able to lower the cost of membership and thereby offer membership to organisations with an interest in being involved in LIXI, without necessarily wanting to license the Standards.
- To link the cost of use to the benefits of use. A tiered licence fee model means licence fees are now set relative to the number of standards used and the scope of their use. Major LIXI users, such as the big four banks, who utilize all of the Standards, pay a higher licence fee than a single-standard user operating in a single state, such as a small valuation firm.
An option to sub-license would break the relationship between the licensing of the IP and the use of the IP, eroding the consistency of the licensing agreement and distorting the revenue structure.
The LIXI I.P. Policy requires that contributed I.P. supporting the standards process be non-exclusively licensed to LIXI and that contributed I.P. that is incorporated into the standard be assigned to LIXI.
Contributed materials typically include the input by contributors' representatives at a working group to business requirements documentation and sample schema as well as postings to LIXI discussion threads. Sometimes contributors will also make pre-existing material available to LIXI. It is essential that LIXI receive a licence to use these materials for the purpose of developing the Standards. Therefore, LIXI requires that contributors grant LIXI a non-exclusive licence over any contributed materials - but not that the contributor assign the IP in contributed materials to LIXI.
It is only when contributed materials become part of a Standard that LIXI requires that the IP in any part of the contributed materials that is incorporated into the Standard is assigned to LIXI. Having developed a Standard, it is essential that LIXI own the IP in the Standard so that it is able to provide Licensees with a secure right to use it. A Standard consists of contributions by all of the working group participants as well as work done by LIXI's staff to document and creates the Business Requirements, Schema, Implementation Guidebook and any other documentation and material that comprise the Standard. It is in the interests of users of Standards that they know LIXI is the sole source of standard IP, as this provides increased certainty that a Standard Licensee will not face a claim by a contributor that the use of a Standard in some way infringes the contributor's IP. It is also in LIXI's interests that it remain the only source from which users can license the Standards.
Contributors who have concerns about the assignment of their IP to LIXI when it is incorporated into a Standard should bear the following in mind. First, it is always a contributor's choice as to what materials they contribute. If you consider that IP gives you a core competitive advantage that you do not want made available to LIXI Licensees, do not contribute it. Second, contributors generally seek to have their IP incorporated in a Standard for a reason – so that the Standard aligns more closely with their way of doing business. It is in fact to their business benefit that a standard look more like their own way of doing business.
Finally, a contributor is given an opportunity to notify LIXI if any IP it is not willing to surrender is included in a Standard. This provides a final safeguard for contributors who do not want to assign their IP in a Standard to LIXI. LIXI's response in such a situation would likely be to modify the Standard so that it no longer incorporated the contributor's IP, because the principle that LIXI own the IP in the Standards is absolutely critical to LIXI's Licensing model.
Prior to 2006, the process did not assign IP of Contributed Materials to LIXI ,rather, it relied on the license granted to LIXI to use the Contributed Materials for the purpose of developing the Standards. A review conducted in 2006 identified this as a IP deficiency, because it could undermine LIXI's ability to enforce and protect its rights as the exclusive owner of to the Standards, Finally, it is worth noting that the new approach to this issue brings LIXI into line with other standards bodies, including MISMO, LIXI's US equivalent, which adopts a similar policy.
Wholly owned subsidiaries engaged in the internal business purposes of the Licensee are entitled to benefit from the licence granted to the Licensee. This is reflected in the End User Licence Agreement, as a wholly owned subsidiary, parent or sibling entity is an Authorised User, provided its use of the Standards is solely for the internal business purposes of the Licensee.
The Authorised User provision does not extend to related entities that are engaging in their own business, as opposed to the business of the Licensee. If you are in any doubt as to the whether an entity in a corporate group qualifies as an Authorised User, then you should request that LIXI consider whether the entity in question can be specifically named as a Licensee or Authorised User in your license certificate.
In making a determination regarding whether a wholly owned subsidiary uses a standard solely for the internal business purpose of the Licensee, LIXI takes a number of factors into account including whether product sets are competing or complementary and the degree of separation between the businesses management, operations, and systems.
LIXI does not permit joint ventures to benefit from the Licence granted to one of the joint venture parties. In this case, the joint venture must obtain its own Licence.
Software vendors are permitted to licence their software directly to the end users of any Licensee, including their clients' end users, provided that the end users are using the software for the internal business purposes of the Licensee. Clause 3.1(c) provides that software vendors may license their software "to a person who holds a current licence from LIXI to Use the relevant Standards". An end user of a Licensee who is using LIXI standards-based software solely for the internal business purposes of the Licensee holds a current Licence (Clause 1.1 of the End User Licence Agreement).
This covers the situation where, for example, broker point of sale software is used to submit electronic applications using the CAL Standard to a lender who holds a Licence of the CAL Standard. When submitting applications to the lender, the broker is an Authorised User of the lender because they are using the software for the internal business purpose of the lender. Under clause 3.1(c), the software provider is entitled to license the software directly to the broker for submitting applications to the lender, as the broker holds a Licence of the Standards for that purpose.
It is important to note that in this example, the aggregator/broker group under whom the broker is submitting the application will itself need to hold a Licence if it uses the Standards for its own internal business purpose as part of the same transaction. An example of this is where the aggregator has integrated the point of sale system with its own back end systems, including CRM, loan tracking or commission systems. In these cases, LIXI is being used for the aggregator's own internal business purpose, as well as for the lender's internal business purpose, and both lender and aggregator must hold a Licence.
The End User Licence Agreement is quite clear on this point – you are not permitted to license your software to anyone unless they hold a licence to use the relevant Standards or are otherwise an Authorised User of the relevant Standards. Any license you purport to grant to a party who does not meet this test will be in breach of your obligations to LIXI under your licence to use the Standards.
You should take your own legal advice on how to ensure that you do not breach this obligation to LIXI. For example, you may choose to include warranties in your licence agreements to the effect that your client holds all necessary licences from LIXI. Or you may ask LIXI that a client who does not itself hold a licence be named as an Authorised User under your Licence Agreement. LIXI will consider granting such a request only in exceptional circumstances. Ultimately, it is your responsibility to ensure that you meet your obligations under the End User Licence Agreement.
No. Third line forcing involves making the supply of goods or services to a person, or the supply of goods or services at a particular price or on particular conditions, conditional upon the person obtaining goods and services from an identified third party.
LIXI has obtained legal advice that the current licensing regime, and in particular, the requirement that software incorporating the Standards be licensed only to parties who themselves are Licensees or Authorised Users of the Standards, does not contravene the third line forcing prohibitions in the Trade Practices Act. Such an arrangement is not uncommon in the software industry, where one piece of software requires another piece of software to run. A simple example is when you send someone a Powerpoint document you expect that they will have licensed a copy of Powerpoint from Microsoft in order to open the presentation.
The LIXI CAL 2.0 Standards Package contains the information necessary for an equipment finance transaction. This information is specifically within Non-Real Estate Asset Types and Vendor Tax Invoice data as well as the Applicant data. The applicant data is generally the same for either an equipment finance or mortgage transaction, so remained widely unchanged.
It is up to an organisation to decide which data they would like to use for the transaction(s) they are conducting.
In the event that LIXI is wound up, rule 130 of the LIXI Constitution provides a mechanism for Members to determine how all assets including IP are disposed of. This provision protects Licensees by ensuring that LIXI's IP continues to be made available to the lending industry by an institution with the same or similar aims as LIXI.
The basic requirements for SMSF applications are accommodated within the CAL schema as follows:
• Applicant 1 (the Borrower) is the SMSF trust with the trustee details provided and @TrustType=”SMSF”;
• Income@Type for Applicant 1 (the SMSF trust/trustee) may include concessional and/or non-concessional contributions.
• Applicant 2 (a Guarantor) is the Security Trust with the trustee details also provided and @TrustType=”SecurityTrust”. The SMSF trust is shown as the Beneficiary of the Security trust. Note that the trustee of the Security Trust may be the same person as the trustee of the SMSF Trust.
• The purchased property is owned by Applicant 2 (the Security trust/trustee, as guarantor) and is offered as security for the loan;
• Rental income is associated with the purchased property;
• Additional guarantors (most likely persons) may need to be provided either to show income, to offer other security, or both.
LIXI Membership and Licensing offer many benefits. For application forms and information on joining, please visit this page.
The first release using this methodology was the LIXI Master Schema 2.0.0 release which included two derived Transaction Schema: LIXI CAL 2.4.2; and LIXI DAS 2.0.0 on February 25th, 2016.
"If it is possible to create an instance of an XML message using the older schema that does not validate against the new schema, the schema change is considered breaking"