Escrow Account¶
| Product ID | PRD-016 |
| Launch tier | 3 |
| Jurisdiction | NZ + AU |
| Status | Planned |
| Regulations | AML/CFT Act 2009 · AML/CTF Act 2006 · Privacy Act 2020 · Privacy Act 1988 · NZ FMC Act |
An escrow account holds funds on behalf of two or more parties until predefined release conditions are satisfied. The bank acts as a neutral custodian — funds are neither the bank's nor any single party's until conditions are met. Common uses include property settlements, M&A transactions, and marketplace payout arrangements. The bank has no discretion over release beyond confirming condition satisfaction.
Key terms¶
| Term | Value |
|---|---|
| Account type | Held-to-condition deposit |
| Parties | Depositor, beneficiary, bank (custodian) |
| Release conditions | Defined in escrow deed; condition satisfaction assessed by MOD-020 |
| Interest on held funds | Per escrow deed — held for the relevant party, not retained by bank |
| Escrow fee | Per fee schedule |
| Disputed release | Funds remain held; dispute resolution via MOD-053 and/or court order |
| Chain of custody | Every fund movement and condition evaluation logged immutably (MOD-022) |
| Statement frequency | Monthly |
System capabilities¶
Condition evaluation is automated where digital evidence is presented — no manual officer review is required for qualifying conditions. A dispute hold is applied within 60 seconds of a dispute submission, blocking any further disbursement until the dispute is resolved. The full chain of custody from deposit to final disbursement is recorded in an immutable log suitable for legal proceedings. Where the escrow deed requires multi-party authorisation, both parties' confirmations are captured before disbursement proceeds.
Eligibility¶
Escrow accounts are available to individuals and legal entities. All parties to the escrow deed must be identified and verified per AML-003 before the account is opened. The escrow deed must be executed before funds are deposited. The bank reviews the escrow structure at onboarding for AML/CFT risk per AML-003.
Account / facility opening¶
- All parties to the escrow agree on terms and execute an escrow deed.
- MOD-105 confirms all parties meet eligibility criteria.
- KYC is completed for all parties per AML-003.
- MOD-049 captures each party's consent; MOD-050 delivers pre-contractual disclosures.
- MOD-007 opens the escrow account. The account is ready to receive funds.
- The depositor transfers funds. MOD-003 records the receipt and MOD-022 logs the deposit event.
Fees¶
| Fee type | Amount |
|---|---|
| Account establishment fee | Per fee schedule |
| Monthly administration fee | Per fee schedule |
| Disbursement fee (per release) | Per fee schedule |
| Dispute administration fee | Per fee schedule |
Fees are applied by MOD-110 and itemised on the monthly statement.
Interest / charges¶
Interest earned on held funds is applied per the escrow deed — it may be held for the depositor, the beneficiary, or split between parties. The bank does not retain interest on escrow balances. Interest is calculated on the daily closing balance and posted per the deed terms.
Statements¶
MOD-113 generates a monthly statement showing: opening balance, funds received, disbursements made, interest credited, fees charged, and closing balance. Statements are delivered to all parties named in the escrow deed via their in-app document vaults.
Closing / exit terms¶
The escrow account closes on full disbursement of all held funds per the escrow deed. If a dispute is open, closure is blocked until the dispute is resolved. Once all funds are disbursed and the account balance is zero, MOD-007 transitions the account to Closed. The immutable transaction log is retained for seven years after closure.
Regulatory¶
New Zealand: Financial Markets Conduct Act 2013 (FMC Act) — client money obligations. AML/CFT Act 2009 per AML-003 — all parties identified. Privacy Act 2020 per PRI-001.
Australia: Corporations Act 2001 — client money obligations. AML/CTF Act 2006 per AML-003. Privacy Act 1988 per PRI-001.
Governing policies¶
- PAY-001 — Payment Operations Policy
- CON-001 — Customer Fairness & Conduct Policy
- CON-004 — Product Disclosure & Sales Practice Policy
- CON-005 — Fee & Pricing Transparency Policy
- CON-006 — Product suitability and governance
- AML-003 — Know Your Customer (KYC) & Identity Verification Policy
- PRI-001 — Privacy Policy
Implementation modules¶
| Module | Name | Status |
|---|---|---|
| MOD-001 | Double-entry posting engine | Deployed |
| MOD-002 | Immutable transaction log | Deployed |
| MOD-003 | Real-time balance engine | Deployed |
| MOD-007 | Account state machine | Deployed |
| MOD-020 | Pre-payment validation suite | Deployed |
| MOD-022 | Payment audit trail | Deployed |
| MOD-044 | JWT role-based access control | Deployed |
| MOD-049 | Open banking consent management | Deployed |
| MOD-050 | Disclosure enforcement module | Deployed |
| MOD-068 | Authentication & session management | Deployed |
| MOD-105 | Product eligibility engine | Not started |
| MOD-110 | Fee engine | Deployed |
| MOD-113 | Statement generation | Not started |
Compiled 2026-05-22 from source/entities/products/PRD-016.yaml