Australia: The Final Report on the review of the PPSA has been released

Last Updated: 29 March 2015
Article by David Carter
Focus: The review of the Personal Property Securities Act 2009 (PPSA)
Services: Commercial, Dispute resolution & litigation, Financial services, Intellectual property & technology, Mergers & acquisitions, Property & projects
Industry Focus: Energy, resources & infrastructure, Financial services, Property

The Final Report on the review of the Personal Property Securities Act 2009 (Cth) (PPSA) was tabled in the Senate last week.

A PDF version of the Report is available for download from the review website at

The Report includes 394 recommendations for improvements to the accessibility and performance of the PPSA and improvements to the Personal Property Securities Register (PPS Register).

The Report conducted by Mr Bruce Whittaker provided a comprehensive review of the PPSA and its operations and incorporated consultation with stakeholders.

The Report identified that the PPSA was introduced to provide greater certainty for Australian businesses, credit providers and consumers and to reduce the cost of secured finance and make it easier for businesses and consumers to use their assets as security. Mr Whittaker reported that the stakeholders feedback made it clear that much work was needed to help the PPSA better achieve these objectives.

Matters covered by the Report

The Report dealt with:

  • the impact of the PPSA over its first three years and the case for reform
  • the reach of the PPSA
  • creating an effective security interest
  • perfection by registration
  • dealings in collateral
  • enforcement of security interests and insolvency of a grantor
  • interaction with other laws and other matters relating to the content of the PPSA
  • next steps
  • recommendations for amendments to the PPSA and the PPS Register.

What were the recommendations from the Report?

Of the 394 recommendations, the following are stand out items that arose under the various matters covered by the Report:

The reach of the PPSA

  • the PPSA not be repealed, but rather that it be amended to enable it to better achieve its potential
  • the definition of "chattel paper" in section 10 and all references in the PPSA to chattel paper be deleted
  • the definition of "PPS lease" in section 13 be amended to remove all reference to "bailments"
  • the Government explore with the States and Territories whether sections 8(1)(i) and 8(5) be amended so that water rights are only excluded from the PPSA if they are able to be recorded under a statutory registration scheme that complies with expectations set out in the 2005 Intergovernmental Agreement on a National Water Initiative
  • the definition of "fixture" in section 10 be deleted
  • the Government explore with the States and Territories whether a regime can be developed that would allow fixtures to be brought within the PPSA.

Creating an effective security interest

  • the Government explore, in consultation with experts in the financial investments industry, ways to deal with issues relating to intermediated securities and investment instruments
  • the term "ADI account" be replaced with a more generic term such as "bank account".

Perfection by registration

  • the layout of the PPS Register, and the order and manner in which it asks questions of a registrant or searcher be reviewed in order to make the Register as simple and easy to use as possible, particularly from the perspective of an unsophisticated user.
  • the PPSA be amended so that:
    • a registration does not need to indicate whether the collateral is consumer or commercial property
    • all registrations against individuals or against serial numbered property must have a maximum term of seven years
    • the definitions of "consumer property" and "commercial property" be deleted
  • if Item 7 of the table in section 153(1) is retained, that it can be made clear that a registration that does not tick the PMSI box can nonetheless perfect a PMSI, but on the basis that the PMSI cannot benefit from the super priority afforded by section 62
  • the collateral classes on the PPS Register be changed to the following six classes:
    • serial numbered property (with appropriate subclasses for the different types of serial numbered property)
    • other goods
    • accounts
    • other intangible property
    • all present and after acquired property
    • all present and after acquired property except
  • the PPSA be amended to make it clear that a registration that contains text that describes collateral is only effective to perfect a security interest in the collateral that is so described.

Dealings in collateral

  • the Government consider, in consultation with States and Territories, whether or not taking free rules may be contained in laws other than the PPSA, and that the PPSA be amended to set out the agreed position
  • the PPSA be amended, if necessary, to make it clear that section 14(1) captures all leases or consignments that give rise to a security interest, whether or not they are a PPS lease or a commercial consignment
  • the PPSA be amended to provide that a sale and lease back can give rise to a PMSI if (and to the extent that) the PMSI secured party paid the purchase price for the collateral directly to the supplier
  • the PPSA be amended to enable PMSI's in inventory to be cross-collateralised to the extent the items of inventory are not separately identifiable
  • sections 62 and 63 be amended to provide a uniform timeframe of 15 business days for a registration that perfects a PMSI for all types of collateral, including collateral that is inventory.

Interaction with other laws

  • the arm of Government responsible for insolvency law reform be asked to consider whether the law should be amended to allow an insolvency practitioner to give notice to claimants on the PPS Register to verify their claims within a set period (say 21 days), on the basis that unverified claims could then be treated as unsecured.

Next steps

  • the Government engage private sector input in the drafting of the Bill for the amending legislation, in addition to them releasing the draft bill for public consultation
  • the Government proceed, if necessary, with the amendments to the PPSA in two stages, by deferring the amendments on matters relating to statutory licences, water rights and fixtures, if necessary, for enactment at a later date
  • the Government develop a targeted campaign in the lead up to the amendments to the PPSA to increase levels of awareness amongst small business of the PPSA and its implications
  • the Government develop and implement a campaign to raise awareness among consumers of the importance of searching the PPS Register before purchasing a motor vehicle or boat, particularly in a private transaction.


The recommendations show that there is a variety of ways in which the PPSA and the PPS Register can be improved to provide greater certainty and also a better level of understanding amongst users.

We will keep you updated on the implementation of the recommendations.

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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