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Connexus : Issue 36
The Act harmonises the law and practice on personal property securities (PPS) in Australia. It replaces more than 70 separate pieces of state and territory legislation, and all electronic and paper-based registers of security interests -- from company charges and registers of encumbered vehicles (REVs) or vehicle securities registers (VSRs), to registers of crop liens -- with a single Commonwealth Act supported by the online Personal Properties Securities Register. The register, which will 'go live' in October, will also allow for the registration of many security interests which have never previously been on any existing register, such as retention of title arrangements, commercial consignments and leases. New special rules for ADI accounts and motor vehicles will obviously be of great interest to credit providers. More generally, to prepare for the register's commencement, mutuals should work out what the PPS changes will mean for their individual institution. Matters to consider include: PPS training for staff; identifying any security interests mutuals hold which will not be automatically registered (see below) and outsourcing PPS documentation and notification functions. Laws rewritten Under the PPS reforms, Australian laws about how security interests in all types of personal property are formed and enforced have also been rewritten. This means a new set of rules will now govern priority disputes between credit providers. The new register will provide a database of any personal property with credit secured against it, including motor vehicles and boats registered on REVs or VSRs, crops, artwork, motorcycles, antiques, aircraft -- almost any piece of personal property valued at over $5,000 that has been offered as security to a credit provider. It will allow credit providers and businesses to record their security interests. The aim is to provide businesses and individuals with access to information about an item of personal property to determine if it already has a security interest attached. If they are involved in a potential credit transaction, they will be able to search the website to find out if an item has already been offered as security. A long-term effect may be to make finance more available and reduce costs as parties to credit transactions make more informed decisions. The office of the PPS Registrar (administered by the Insolvency Trustee Australia) will administer the register. Credit providers need to prepare for the imminent introduction of a national online register of personal property securities, which is a key feature of major reforms brought by the Personal Properties Security Act 2009. By Guy Griffin Preparing for PPS connexus www.abacus.org.au 36 LEGLISATION A long-term effect may be to make finance more available and reduce costs as parties to credit transactions make more informed decisions.