Update: Personal Property Securities Act
The launch of the Personal Property Securities Act (PPSA) has been deferred until October 2011. Further changes to both the Personal Property Securities Act 2009 and the Corporations Act 2001 are imminent with an amending Bill introduced to Federal Parliament last week.
The legislative changes provide additional measures to ensure that the regime is appropriate for users by:
- Providing exemptions to the rules on taking personal property free of security interests for temporarily perfected transitional security interests and transitional security interests which were not previously registered by serial number
- Amending the definition of ‘security interest’ so that it is consistent with the New Zealand legislation
- Clarifying that CHESS securities are intermediated securities. Additionally, where financiers have a charge over CHESS securities, they often enter into agreements with a broker to ensure the financier consents before there are any dealings with securities. The Bill clarifies that an arrangement of this nature will be sufficient to constitute “control” of CHESS securities for the purposes of perfecting a security interest.
- Amending s44 of the PPSA to ensure that transitional security interests which will be migrated from the current registers will not be exposed to extinguishment if they are not registered by reference to serial number. It is important to note that this exception does not apply to migrated security interests in motor vehicles or watercraft.
- Imposing conditions on accessing and using data on the Register to ensure that parties cannot sell this data
- Enabling the Registrar to investigate breaches of the rules authorising searches of the Register and registration of security interests on the Register
There remain, however, a number of other important issues unresolved by the amendments. The PPSA regime is complex and implementation will require careful planning and preparation by all businesses. MST has been actively participating in the PPSA Legal Special Interest Group and in consulting with the Attorney General’s department regarding legislative developments.
MST’s breakfast seminar on Tuesday, 8 March will provide participants with an overview of the new Act and its likely effect on companies who need to protect ‘personal property’, as well as setting out how the new regime will operate. Please click here if you have not yet registered for this seminar.
For further information on the PPSA, please contact one of our Corporate Advisory lawyers.
Authors: David Boyall & Susan Reece Jones