The long-awaited package of reforms to the PPSA is finally out. It's time to digest and have your say. 2 min read
The Federal Government has invited public consultation on its proposed changes to the Personal Property Securities Act 2009 (Cth).
The changes are extensive and will implement most of the 394 recommendations from the 2015 Whittaker Review. It's mostly good news, but there's a lot to think about and do. In practice, the changes will mean:
- the search, registration and risk assessment practices of financiers and suppliers will have to change
- financiers and insolvency practitioners will need to get their heads around a new regime that is simpler and more friendly to grantors, whilst more onerous on them
- finance and supply documents are likely to need to be amended
- the transition, when the changes commence, will need careful thought and planning to get right.
Some of the key changes currently proposed include:
- significant changes to the PPSA search and registration processes
- no more registrations against trust ABNs (making life much easier in relation to trustees of single trusts, but more complicated in relation to trustees of multiple trusts)
- new limits on registration times for ALLPaPs (which will require new renewal processes and incur more costs over time)
- a new regime for PMSIs and who benefits from super-priority
- significant changes to PPS Leases (leaving some big question marks over super-priority and bailments that are not leases)
- vehicle, yellow goods, ships and aircraft lessors and other asset financiers will have to grapple with new rules about registration, pooling arrangements and what we think is an imperfect attempt to tidy up lease chains and taking free provisions
- changes to transfers of accounts that will expand account debtor rights and make enforceability of transfers riskier for receivables financiers.
What's next?
The exposure draft of the amending legislation and regulations, and other consultation materials, are available here.
The consultation period runs until 17 November 2023 (but we are aware that some organisations have received extensions).
We've all lived with the PPSA for more than a decade and know its strengths and weaknesses. We'll be taking the opportunity to make submissions on how to make it even simpler and more workable, and encourage you to too.
It's important to consider what the PPSA changes will mean for your business. Contact us if you would like to discuss how the reforms will affect your business.