As mentioned in our August 2009 Update, the Committee
recommended the passing of the Personal Property Securities Bill
2009 (PPS Bill) on the basis that a consequential amendments bill
be passed to deal with those issues raised in the Submissions to
the Committee's 2009 Inquiry which the Government proposed to
The Personal Property Securities (Consequential Amendments) Bill
2009 (Amendment Bill) was released to the House of Representatives
on 21 October 2009. This Update highlights the progress that has
been made in relation to the implementation of the PPS regime and
the matters dealt with by the Amendment Bill.
Status Of Referring Legislation
In order for the PPS regime to operate on a national basis, each
State is required to pass referring legislation allowing the
Federal Government to administer the PPS Bill.
Such referral legislation has been passed in New South Wales,
Queensland, Victoria and South Australia and it is likely that the
other States will introduce their referral legislation in the near
Clearly, progress is being made to have in place a national
framework in time for the proposed commencement of the PPS regime
(currently May 2011).
The Amendment Bill deals with two matters being:
Modifications to other legislation (other than the
Corporations Act 2001) to harmonise language and concepts
with the PPS Bill and ensure that there is no conflict between the
PPS Bill and such other pieces of legislation. The laws to which
these provisions extend include intellectual property laws (being
the Designs Act 2003, the Patents Act 1990 and
the Trade Marks Act 1995).
Various individual amendments to the PPS Bill itself.
Amendments To Other Legislation
Although we applaud the Attorney-General's endeavours to
clarify how the PPS Bill will operate in association with other
legislation which impacts on matters dealt with by the PPS Bill,
the Amendment Bill was released without including the changes
relevant to the Corporations Act 2001. As the PPS Bill is
intended to replace the charges provisions of the Corporations
Act, those amendments will be fundamental to the PPS Bill
achieving the desired policy outcome. The Explanatory Memorandum
provides that the amendments to the Corporations Act will
be done by way of a separate bill following a public consultation
This implies that there will be a further consequential
amendments bill to the PPS Bill. In addition, regulations will need
to be released in order to fully understand the operation of the
PPS regime. We expect that upon commencement of the PPS regime, a
consolidated Bill will be available to assist readers to understand
Amendments To The PPS Bill
In relation to the amendments made to the PPS Bill, we note that
none of the more significant issues raised in the submissions to
the 2008 and 2009 Inquiries have been included.
Although a number of the issues raised relate to policy, in
respect of which the Government has clearly made its choice, other
matters go towards making the PPS Bill operate as intended.
For example, section 160 of the PPS Bill provides that a
registration will be effective once the description of the
collateral the subject of the security interest can be searched by
reference to the 'secured party'. As the secured party is
the holder of the security interest, this section requires
amendment as searches will be done against the name of the grantor
of the security interest, not the financier. This is consistent
with all searches done on other registers and records. We have
raised this matter in our submissions to both Inquiries and expect
that this and other matters will be identified and dealt with by
way of further consequential amendments to the PPS Bill.
What Should You Do Now?
Although further changes are likely to be made to the PPS Bill,
the main provisions of the Bill appear to be now finalised. This
will assist parties in considering how the new regime will impact
on their business.
Clearly, given the complexity of the PPS regime, it is essential
that financiers and other parties who will be affected by the PPS
regime start considering their documents and procedures so as to be
ready for the new regime upon its commencement. We recommend that
you take advantage of the long lead time available to understand
the operation of the PPS Regime and suggest you seek advice on how
the regime will apply in common scenarios relevant to your
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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