The Attorney-General has confirmed the registration commencement
time for the Personal Property Securities Act (PPSA) is
Monday 30 January 2012 (commencement date). If you haven't yet
done anything about PPSA, time is running out - there are only
eight weeks to go, including the Christmas/New Year holiday
The PPSA will change the way businesses and individuals deal
with personal property (ie essentially all property except land).
The PPSA will introduce a new national system for registering
security interests, and also changes what is considered a
"registrable" security interest. If you own, lease, buy
or sell personal property, then you need to be aware that the game
is changing soon.
The Attorney-General's announcement also confirmed the
migration of data from current security registers (eg the ASIC
company register and REVS) to the new personal property security
register (PPSR) as of Monday 21 November 2011 (migration time). A
practical analysis by businesses is necessary to ensure that
secured parties can effectively navigate the period between the
migration time and the commencement date (migration period).
Migrated security interests
A transitional security interest (TSI) is created by a security
agreement which is currently in force and that will continue to be
in force after the commencement date. The PPSA only applies to TSIs
from the commencement date.
TSIs that are currently registered on a transitional register
will, subject to certain requirements, become a migrated security
interest. To be migrated, the security interest must be:
(a) a TSI
(b) registered on a transitional register that was effective
immediately before the time the data was migrated to PPSR
(c) accepted by the PPSR Registrar (Registrar).
In addition, the registration in the transitional register must
have been duly authorised by the law under which the register was
Complications in the transitional provisions
Under Division 7 of the PPSA the Registrar may accept an
application for registration of a TSI after the migration time and
before the commencement date. That is, if the Registrar is
satisfied that a TSI will (whether before, at or after the
commencement date) be:
(a) "attached" to the collateral
(b) held by the applicant
(c) operationally practicable for the Registrar to register the
financing statement or financing change statement before the
If the Registrar accepts the application for registration, the
Registrar may register the security interest before the
commencement date. Though, the temporary perfection afforded to
TSIs will commence no sooner than the commencement date.
This sounds fantastic, however currently this part of the
legislation cannot be utilised as the PPSR is currently not
accessible. So despite providing legislation that allows for
preparatory registrations to be made for TSIs, the reality is that
Division 7 of PPSA cannot be relied upon until PPSR is accessible.
It is unlikely that the PPSR will become available before the
Migration period issues
Some questions that may arise are:
what do you do if your migrated TSI needs to be amended during
the migration period?
how should you deal with a partial release of a migrated
should all current registrations, including provisional charge
registrations, be lodged with the current register, or should you
simply wait until the commencement date to put a financing
statement in place on PPSR?
What approach should businesses take to obtain the highest
priority, or best security, as a secured party during the migration
Given the likely inability to effect
"pre-registration" under the PPSA as referred to above,
the most prudent approach is to register all new securities,
amendments and releases now, on all current registers, including
ASIC, and not delay any action until the commencement date. You
should then check the PPSR on or shortly after the commencement
date to ensure registrations effected during the migration period
have indeed been migrated. Any error or non-migration can be fixed
at that time by lodging a financing statement.
If you want to ensure your relevant interests in any personal
property is secured and you haven't yet reviewed your current
business arrangements, you are running out of time.
If you are not sure how the PPSA will affect your business,
please contact one of our team to discuss and we can provide you
with practical solutions to deal with any personal properties
securities (PPS) issues you may encounter.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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