The PPS reform agenda continues

18 March 2010

The legislative activity that resulted in the enactment of the Personal Property Securities Act 2009 (PPS Act) and the Personal Property Securities (Consequential Amendments) Act 2009 in December 2009 has recommenced with the introduction of the Personal Property Securities (Corporations and Other Amendments) Bill (CA Amendment Bill) 2010 into Federal Parliament on 10 March.

The Bill contains important amendments to the Corporations Act 2001 and revises the transitional and some other provisions in the Personal Property Securities Act 2009. It also makes related amendments to other Commonwealth legislation.

Structure of the CA Amendment Bill

Schedule 1: Corporations Act. This schedule makes changes to the Corporations Act to align it with the PPS Act and close the Register of Company Charges.

Schedule 2: PPS Act. This schedule amends the PPS Act to, among other things, simplify the transitional provisions.

Schedule 3: Amendment of other Commonwealth Acts. This schedule makes consequential amendments to other Commonwealth legislation.

Amendments to the Corporations Act

The amendments include:

closing the Register of Company Charges (ASIC Register) under Chapter 2K of the Corporations Act and replacing the ASIC register with the PPS register;
providing transitional and application provisions to assist with the transition to the PPS system; and
aligning the terminology of the Corporations Act with the PPS Act's functional approach to defining security interest, particularly as it applies to liquidators and administrators.

Amendments to the PPS Act

The most substantial amendment to the PPS Act is the introduction of revised and much simplified transitional provisions. Other changes include the expansion of the list of interests exempted from the Act and technical changes to some defined terms as well as the amendments to the provisions relating to perfection of security interests over ADI accounts; to some of the other procedures for creating and perfecting security interests; to the priority and extinguishment rules; to the enforcement provisions; and, to the rule that unperfected security interests vest in the grantor on its administration or insolvency.

The Bill also makes a number of related amendments to other Commonwealth Acts.

Going forward

The personal property security (PPS) reforms will result in a number of significant changes and this Bill proposes further important amendments to the Corporations Act which need to be reviewed with care. Strategies developed to facilitate the introduction of the PPS regime may need to be reconsidered in the light of the revised transitional provisions.

For further information, please contact:

Ralph Mann | Partner
Mullins Lawyers
t +61 7 3224 0260
f +61 7 3224 0230
rmann@mullinslaw.com.au