Other jurisdictions have adopted PPS and their experience tells us that all businesses will be affected by the new reform – it is no longer only the domain of financial services organisations.
What does PPS reform mean to your organisation and how will it play out over the coming year?
How does it affect you?
Banks and others in the finance sector
You should now survey your products
and transactions across your entire portfolio to scope the effect and the task
ahead. Then you will need to review, and in all likelihood redesign, policies,
procedures, systems and standard documentation. You will also need to assess the
effect on existing transactions.
Leasing companies and others who provide the use of equipment as part of
their business
You should also be scoping the task ahead. Leases and other
arrangements under which goods are provided will be regarded as security
interests. These can include arrangements where equipment is provided as part of
a service, for example where a cable or satellite TV company provides
transponder units to customers.
Securitisers and debt factors
Assignments of some debts will be deemed
security interests and may need to be registered. You also will need to scope
out the effects of PPS reform.
Resources, manufacturing, retail and trading companies
You should examine
the standard terms under which you acquire and dispose of property, with a
particular focus on retention of title clauses. In many cases, these will be
security interests (as defined) and your rights and priorities may be affected.
Construction and other contractors
You will need to consider the effect on
your rights against principals and sub-contractors, particularly in regard to
goods delivered on site and contractual rights to payment.
Joint venturers
You should examine any cross charges and also clauses in
joint venture documentation dealing with default.
Borrowers
You should examine your negative pledge clauses as many
transactions that are not currently regarded as security interests will become
security interests and may be caught by the legislation.
Parties to contracts
When negotiating and drafting contracts, you will need to
take account of the fact that it may no longer be possible to prevent
assignments by a party of amounts owing under the contract.
The details of PPS reform are still developing and these pages will provide you with updates on key developments. We have also developed a PPS Business Impact Scoping Tool, to help businesses assess and manage their exposure to PPS reform. Please speak to your relationship partner or our PPS team for further details.
Reform timeline
It is likely that the registration commencement time will slip to February 2012. We will inform clients and update these pages when this announcement has been made.
Recent news
Allens Media Release: Resources sector facing legislative shake-up
22 July 2010
The resources sector is set to face one of its biggest legislative shake-ups since the introduction of the GST. Read more.
Allens Media Release: Media and IT industries need to be prepared for personal securities changes
15 July 2010
Companies in the communications, media and IT industries will need to be prepared for incoming legislation that may have a dramatic effect on the ownership of assets, according to a leading law firm. Read more.
Consequential amendments Bill passes through Senate
21 June 2010
The Personal Property Securities (Corporations and Other Amendments) Bill 2010 has now been passed by the Senate and is awaiting Royal Assent. The Bill was passed following the Senate Legal and Constitutional Affairs Legislation Committee Report on the Personal Property Securities (Corporations and Other Amendments) Bill 2010.
Personal Properties Securities (Corporations and Other Amendments) Bill 2010 introduced in House of Representatives
10 March 2010
The Personal Property Securities (Corporations and Other Amendments) Bill was introduced to the House of Representatives today along with an Explanatory Memorandum. The Bill proposes amendments to the Corporations Act 2001 to align it with the Personal Property Securities Act 2009 and amendments to the Personal Property Securities Act 2009 to simplify the transitional provisions. The Bill also makes consequential amendments to other Commonwealth legislation dealing with properties such as patents, designs, trade marks and fisheries.
Bill receives Royal Assent
15 December 2009
The Personal Property Securities Bill 2009 and Personal Properties Securities (Consequential Amendments) Bill 2009 have received Royal Assent. An Act Compilation of the Personal Property Securities Act 2009 (Cth) has been published on ComLaw.
Public consultation on proposed Corporations Act and other amendments
4 December 2009
The Attorney-General's Department has released the draft Personal Property Securities Bill (Corporations and Other Amendments Bill) 2009 – Amendments to the Corporations Act for public consultation. The Bill will make consequential amendments to the Corporations Act to (among other things) align it with the terminology, registration requirements, and transitional provisions in the Act.
Bill passes through both houses
26 November 2009
The Personal Property Securities Bill 2009 and Personal Properties Securities (Consequential Amendments) Bill 2009 have now been passed by both Houses of Parliament and are awaiting Royal Assent.
Allens Media Release: Personal property securities legislation close to being passed
24 November 2009
Personal Property Securities legislation continues its path through Federal Parliament and its final form is taking shape. Read more.
Senate Committee submissions and reports
ongoing
The joint law firms Allens Arthur Robinson, Blake Dawson, Freehills Lawyers and Mallesons Stephen Jaques made joint submissions to the Senate Legal and Constitutional Affairs Committee regarding the draft of the Bill, each amending Bill and the Regulations. Copies of the submissions and the reports of the Senate Committee are linked from the PPS Lawlinks page.
Public consultation on draft Regulations
October 2009
A paper discussing the Regulations to be made under the Personal Properties Securities Act 2009 (Cth) has been released by the Attorney-General's Department.