Who does this affect?

Financiers who lend on a secured basis, securitisers, equipment lessors, sellers of goods on retention of title arrangements.

What do you need to do?

Start thinking about personal property securities reform now so that you can take the opportunity to provide feedback on the proposed reforms before they are introduced. We can help.

Author
Helena Busljeta  
Special Counsel - Precedents
John Canning  
Partner
T +61 2 9296 2098

Perth
Nicholas Creed  
Start thinking about personal property securities reform now so that you can take the opportunity to provide feedback on the proposed reforms before they are introduced. We can help.

Brisbane
Berkeley Cox  
Start thinking about personal property securities reform now so that you can take the opportunity to provide feedback on the proposed reforms before they are introduced. We can help.

14 March 2008

Personal property securities reform still on the agenda - 14 March 2008

The Australian Attorney-General has confirmed that the Australian Government remains committed to reforming the law on personal property securities (PPS) and that it plans to release exposure draft legislation shortly.

In a speech made at the Institute for Factors and Discounters Annual Luncheon on 6 March 2008, the Attorney-General confirmed that:

  • PPS is a key part of the Australian Government's regulatory reform agenda. On 20 December 2007, the Council of Australian Governments committed to pursuing a deregulation agenda and established a Business Regulation and Competition working group to oversee reform in the regulatory “hot spots”. PPS reform is high on the list of hot spots.
  • Exposure draft legislation coming soon. Significant progress has been made on the draft PPS Bill and it will be released for public comment shortly.
  • Negotiations with State governments have commenced. The Australian Government has been negotiating an Inter-Governmental agreement with the States to underpin the national scheme.
  • The design of the PPS register is underway. The Australian Government is looking at how to make the best use of contemporary information technology in building the register to deliver a highly functional, but low cost, solution.

You can view the speech here.

What is PPS reform about again?

The PPS legislation will establish a national system for the registration of security interests in all property other than land. It will include new rules for determining priority between competing security interests in the same personal property. The new system may be in place by 2009.

It will affect the way security is taken over almost every form of property other than land. This will affect the business of financiers. However, the legislation will also affect transactions which are currently not regarded as securities and this will impact on the business of lessors and suppliers of goods.

The PPS reform process so far

In April 2006, the Standing Committee of Attorneys-General issued an options paper to gauge the level of support for PPS reform. This was followed by three detailed discussion papers in November 2006 and March and April 2007 to refine the policy behind the reform.

Copies of the options paper and discussion papers, together with Mallesons’ responses, can be found in our previous Review.

What should you be doing now?

The proposed reforms raise policy and business issues for financiers, suppliers and lessor of goods. Further consultation will take place on the exposure draft legislation when it is released.

Businesses should start thinking about personal property securities reform now so that they can take the opportunity to provide feedback on the proposed reforms before they are introduced. In addition, businesses need to start planning for the transition to the new system.

If you want more information on any aspect of PPS reform, please contact Partner John Canning.