Property Securities Act 2009(PPSA) was due to
come into force on 31 October 2011, however, the Commonwealth
Attorney General's department has now confirmed that this date
is not achievable and it is now targeting a date before 1 February
When it is implemented, the PPSA will introduce an assortment of
new terminology and concepts to the area of security over
assets. Some of the new terms include:
security interest in a circulating asset
The PPSA will introduce a new register where all security
interests will be registered. The PPS
Register will replace existing registers, including the
company charges register at ASIC and the REVS register.
Under the PPSA a security interest will not be enforceable
unless it attaches to collateral. Attachment is
similar to the concept of the creation of legally binding
relations. A security interest attaches to collateral when the
grantor gives value for the security interest or carries out an act
by which the security interest arises.
The PPSA will also create the concept of
perfection. Perfection is a form of protection for
a secured party that is stronger than the mere attachment of its
security interest. In order for a security interest to be perfected
it must have attached, be enforceable against third parties and
either be registered on the PPS Register or the collateral must be
in the possession or control of the secured party. The
perfection of a security interest will affect the priority it has
relative to other security interests in the collateral, and its
status in the event of the insolvency or bankruptcy of the grantor.
Transition to PPSA
As part of the transitional arrangements, all current security
interests on relevant registers of security interests will be
migrated to the PPS Register when it becomes active. A transitional
security interest (one which is in force at the time of transition
to the new regime) will be deemed to attach to the collateral
immediately before the PPS Register becomes active. This ensures
that any existing security interests will not be affected and will
retain their priority. There will be a transitional period of 24
months during which holders of security interests will be able to
perfect their security under the PPSA.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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