Personal Property Securities Act 2009 (CTH) Transitional Period Expired

The two year transitional period for registration of personal property under the Personal Property Securities Act 2009 (Cth) has now expired as of 31 January 2014.

Background to the Act

The Act establishes a single national law governing security interests in personal property. This has resulted in a more certain, consistent, simpler and cheaper arrangement for personal property securities for the benefit of all parties.

The Act is modelled on the New Zealand, Canadian and US legislation. It also draws on work by the United Nations Commission on International Trade Law (UNCITRAL) and the International Institute for the Unification of Private Law (UNIDROIT).

The Act also addresses the complexity of over 70 Commonwealth, State and Territory laws, common law rules and rules of equity governing personal property securities. It provides a more modern and efficient personal property securities regulatory system which is essential for any modern financial system.

Expiry of Transitional Period

The Personal Property Securities Act 2009 (Cth) also created a two-year transitional period to provide a grace period for the registration of transitional security interests (TSAs). The two year transitional period expired on 31 January 2014.

TSAs are security interests which existed before 30 January 2012. Registration of a TSA on the Personal Property Securities Register (PPSR) during the transitional period preserves the priority date of the TSA to prevent subsequent perfected security interests from taking priority. While some TSAs were automatically migrated onto the PPSR pursuant to the PPSA (such as the ASIC register of company charges and state/territory registers for security interests in motor vehicles), many others were not. 

Now that the transitional period has ended, unregistered TSAs will be considered an unperfected security interest and risk ranking behind subsequent perfected security interests or vesting in an administrator upon the grantor’s insolvency. It does not matter that the TSA was created first, but rather the priority date of perfection of the security interest. 

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Personal Property Securities Act 2009, as reproduced on TimeBase LawOne

End of PPSA transitional period: is your house in order?

The transitional period under the Personal Property Securities Act expires on 30 January, 2014