Last week we noted the one year birthday of the Personal Properties Securities Register. In a Media Release by the former Commonwealth Attorney-General, Nicola Roxon, Roxon welcomed the news that the Personal Property Securities Register (PPSR) now includes more than 7 million registrations and that more than 6 million searches have been made by users of the Register.
Roxon reiterated the importance of the new Register saying that “No one wants the bank repossessing their boat, car or machinery because they’ve been duped into buying property that someone else owes money on”.
“The Personal Property Securities Register has now been up and running for one year and serves as a one-stop-shop for people to check that the used goods they are buying don’t have a security interest over them.
“The Register gives additional protection for businesses that lease or supply goods, in the event that a debtor defaults or goes bankrupt.”
“Lenders are also more willing to accept different kinds of property as security because this resource makes it easier for them to check the goods and brings the property together under the same law.”
The PPSR has now rendered more than 70 Acts and Registers around the nation defunct, replacing them with a single, centralised, online register of interests in personal property. The online register is publicly accessible 24 hours a day, 7 days a week to consumers, businesses and the finance industry alike.
If you’re unsure if this legislation affects you can refer to the Government’s PPSA Key Facts Sheets, Frequently Asked Questions and Information Sheets and if you have any questions, please contact us.
“Today, 30 January 2013, marks the first anniversary of the Personal Property Securities Register (PPSR).”
In the January PPSR Newsletter produced by the Australian Government’s Insolvency and Trustee Services Australia we are reminded that twelve months ago the PPSR became a national online register of personal property securities for consumers, businesses and the finance industry to access 24 hours a day, 7 days a week.
Among the statistics noted in the update is a mention of the PPSR being cited as an example of an initiative taken to strengthen the legal rights of borrowers and lenders in 2011 / 2012 in the World Bank’s report “Doing Business 2013 – Smarter Regulations for Small and Medium-Size Enterprises”.
It’s important to note that even though the PPSR legislation has been operational for 12 months many businesses are still getting caught out. Under the legislation, companies must protect the payment and ownership rights of assets that they put in the possession of another person or business by registering them on the Personal Property Securities Register (PPSR).
If you’re unsure if this legislation affects you please read review the Government’s PPSA Key Fact Sheets, Frequently Asked Questions and Information Sheets and if you have any questions, please let us know.
Personal property includes all forms of tangible and intangible property except land, fixtures, water rights and certain other statutory exceptions. In the case of your day to day business it may include motor vehicles, furniture, artworks, inventory and stock, shares, plant and machinery, accounts receivable, intellectual property and many other things.
Importantly, business owners need to be aware of the changes and may need to take further steps to protect their rights and interests (where previously they did not need to do so). In particular, the changes can affect arrangements such as the supply of goods on:
- consignment, or
- retention of title arrangements.
The ASX has announced its intention to establish an on-market book build service for captial raisings. A key intended benefit over existing book-building by brokers and investment banks is that there will be greater transparency as to allocation of securities.
This may be attractive for companies concerned with fairness and/or the perception of fairness to retail investors. The issue here, as demonstrated by the recent QBE capital raising where the heavily discounted offer was oversubscribed is that particular investors may receive preferential treatment in a book build at the expense of other existing shareholders for whom the value of share holdings is diluted.
However, there are concerns that the issuer company will have less control in an on-market book build including less control in obtaining quality, long-term investors as opposed to opportunistic short-term investors. Further, the issuer may have less control over the process in general and investors may have less incentive to make applications earlier.
The proposed on-market book build service is intended to be a voluntary process and listed companies may continue to use private book builds arranged by investment banks.
The ASX anticipates that its proposed facility will be operational by the end of the year.
Despite the Personal Property Securities Register having come into effect in January this year, the Personal Property Securities Act (2012) is still a mystery to many businesses, who are unaware or yet to grasp the potential risks of the new legislation. Under the legislation, companies must now protect the payment and ownership rights of assets that they put in the possession of another person or business by registering them on the Personal Property Securities Register (PPSR).
The new regime forces business owners to abandon traditional concepts of ownership and reliance on retention of title clauses in their contracts to adequately protect their interests. While many companies have heard of the radical changes, a significant number are yet to take the required measures to ensure compliance, leaving themselves open to potentially devastating consequences if other businesses that they transact with on a day to day basis become insolvent or on-sell their property to a third party as explained in the article ‘Businesses still in the dark over PPSA’ where valuable practical advice for business owners is offered.
Insolvency and Trustee Service Australia (ITSA) have just released the latest PPS Stakeholder update. ITSA continues to record feedback on the PPSR in an ‘enhancement log’ for future upgrades. Cycle 2 of User Acceptance Testing is due to commence. Testing will be based on Business to Government functionality including enhanced reporting and compilation of multiple search results in a single PDF document.
The following new Fact Sheets have been released:
The above Fact Sheets and other Fact Sheets are available on the PPSR website.
We continue to get a lot of feedback from clients about the confusion surrounding the PPSA generally and also in navigating around the PPS Register. It’s encouraging to see ITSA is actively engaging with industry to improve the Register and provide clear guidance as to the application of the PPSA.
We will endeavour to keep you updated, however, if you have any questions please let us know.