Securitisation transactions have historically been structured in
a manner so as not to attract ad valorem stamp duty in any
Australian State or Territory. This was achieved through the
adoption of Clayton's contracts (which permits an offer to
assign receivables to be accepted by conduct alone without
requiring that the acceptance be evidenced in writing).
Over time, each Australian State and Territory (other than South
Australia) either abolished, or afforded exemptions from, any
ad valorem stamp duty applicable to securitisation
transactions, thereby reducing the necessity for securitisation
transactions to rely upon Clayton's contracts.
By contrast, South Australia did not offer a broad exemption in
respect of ad valorem stamp duty arising in respect of
securitisation transactions (it offered a limited transfer of
mortgage exemption). Accordingly, the Clayton's contract
(essentially redundant in the other Australian States and
Territories) was retained largely for its continued relevance in
However, the enactment of the Personal Property Securities Act
2009 (Cth) (the PPS Act) gave cause for concern
for securitisation transactions which would effect assignments of
receivables located in South Australia (Relevant
Securitisation Transactions) following the commencement of
operation of the PPS Act on 30 January 2012 (the PPS Start
Under the PPS Act, one of the requirements for a perfected
security interest is that it can be "enforced" (ie.
defended) against third parties. There has been a real concern
whether a Clayton's contract can satisfy the requirements of
the PPS Act. This has led to a desire to amend documentation to
allow acceptance in writing.
Parties to Relevant Securitisation Transactions faced a Catch
22; on the one hand, it would be economically desirable to continue
to effect assignments by way of Clayton's contracts (and not
evidence the assignment in writing) for the purposes of South
Australian stamp duty, while on the other hand it would be
desirable to ensure that the "security interests" arising
under the PPS Act would be enforceable against third parties.
Accordingly, in a letter dated 7 February 2011, the Australian
Securitisation Forum (the ASF) made a submission
to the Treasurer of South Australia in respect of the application
of the South Australian Stamp Duties Act 1923 and the dilemma that
would be faced by parties to such Relevant Securitisation
Transactions on and after the PPS Start Date.
Yesterday (31 January 2012), the Commissioner of State Taxation
announced in Revenue
Ruling SDA004 that ex gratia relief will be granted to
securitisation transactions that would otherwise be dutiable in
South Australia on or after the PPS Start Date, provided that such
securitisation transactions comply with the requirements set out in
the Ruling, thereby paving the way for securitisation transactions
to dispense with the Clayton's contract (and thus permit the
requirements of the PPS Act to be satisfied without material
The announcement is sure to be welcomed by the securitisation
industry, providing certainty to the parties to a securitisation
transaction that involves any assignments of receivables located in
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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