Personal Property Securities (PPS) reform will dramatically change PNG's law and practice relating to security interests over assets (other than land). It will affect a wide range of services and businesses, not just those in the finance sector.
The Personal Property Security Act 2011 is expected to commence operation in 2015.
Some key features
Some of the key features of the PPS reform are as follows.
- the Act fundamentally rewrites the law of 'security interests' in personal property;
- it uses a 'substance over form' approach to defining a security interest. It also deems commercial consignments, certain leases and assignments of some accounts receivable to be security interests (even where they do not secure money);
- in some cases it will be irrelevant who has title to an asset;
- there will be a single electronic register of security interests;
- perfection is necessary to ensure a security interest has priority over other security interests and is effective in a liquidation or bankruptcy. Perfection can be via registration, possession, or (in the case of certain financial property) control;
- the Act sets out rules regarding priority and when an asset can be transferred free of a security interest;
- 'All assets' charges continue to be possible. However, there is a long list of circumstances in which the secured party can lose priority or security over the asset, even when the party buying or taking security over the asset has knowledge of the earlier security interest. This is a weakening from the pre-PPS position and requires secured parties to take extra steps to protect their position; and
- the Act contains some proscriptive rules for enforcement; and
- generally you cannot be contracted out of the Act.
Here are some resources to help you navigate the changes introduced by PPS reform.
- Read our recent articles about Personal Property Security reform in PNG
- Presentation slides outlining 'what you need to know' about the Personal Property Security reform in PNG
- Presentation slides outlining how the reform might affect your industry sector and what your business should do to ensure you are ready
- a simple questionnaire to help you spot PPSA 'security interests' in your business
- Contact an expert with any queries you may have regarding the Personal Property Security reform in PNG
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