Australian Personal Property Securities Laws
Australian laws relating to personal property securities (“PPS”) have been messy for years, based on often incomplete state records which have never been centralised. The major rationales for the reforms are that the previous laws were inflexible, outdated, and prevent product innovation. Personal property incorporates intellectual property , an important repository of wealth in the 21st century.
This causes a need to incorporatefor flexible and modern laws which encourage consumers and producers to “conveniently … raise finance …on the security of such property” which encourage investment which in turn leads to the creation of wealth.
The old PPS laws are majorly derived from 19th century legislation …show more content…
Furthermore, ASIC will no longer be used to separately register PPS interests in corporate assets.
Under the old laws, the buyer or institute had to search the entire database of ASIC to locate the status of an asset and the name of any interest holder. Currently, as registration is mandatory at the time of transfer of ownership and because it is to be done online the information is updated instantly and is available to interested parties.
As the classification heads under which the assets are to be registered in the PPSR have been confined to 9, it is easier to put the asset under the appropriate head – or more than one if need be. If the asset falls under more than one head, then it can be registered under all the three heads so that anyone searching it under one head knows its combined liability under the other applicable heads.
There is also the option of registering the security interest under the ‘Collateral’ head for assets already pledged or mortgaged. No buyer of any asset need depend on the certification given by the vendor.
Article 9, UCC has been adopted in the modeling of the Australian reforms. In addition, the New Zealand and the Canadian personal