PPS Reform and the fishing Personal Property Securities Register

Document Sample
PPS Reform and the fishing Personal Property Securities Register Powered By Docstoc
					                                                                      Personal property is property other than land or
PPS reform and the fishing
                                                                      buildings. It includes physical goods such as
industry                                                              watercraft, trailers, machinery, trucks, household
                                                                      items and furniture, electrical goods, jewellery,
                                                                      cars, crops, as well as intangible property (for
                                                                      example, SFRs and rights under a contract).
                                                                      WHAT IS A SECURITY INTEREST?
From early 2012, when personal property securities (PPS)
reform is expected to commence, the Australian Fisheries              Generally, a secured creditor takes a security
Management Authority (AFMA) will no longer be registering             interest to enforce its rights against particular
third party interests in Statutory Fishing Rights (SFRs).             items of collateral in case the debtor defaults on
Under the reforms introduced by the Personal Property                 the obligation. If the debtor is declared bankrupt,
Securities Act 2009 (Cth), a third party security interest in a       a secured creditor takes precedence over an
SFR will be known as a security interest in personal                  unsecured creditor in the distribution of the
property.                                                             property of the debtor who is declared bankrupt.

Instead of notifying AFMA of the third party interest in a SFR        Under the PPS Act, a creditor would be
- after PPS registration commencement - you may register              considered to be a secured creditor if they had
the security interest in personal property on the PPS                 met certain requirements, which will generally
Register. Third party interests already registered with AFMA          include registering their security interest on the
will be automatically transferred to the new national online          PPS Register.
PPS Register before PPS Register commencement.
                                                                      WHAT DOES PPS REFORM MEAN FOR ME?
If you have a third party security interest in a state or territory
fishing licence you should seek professional advice about             Upon commencement, the PPS Register will be
that because state and territory fishing licences are not part        the authoritative record of registered security
of PPS reform.                                                        interests in all types of personal property,

PPS REFORM                                                            Registering an interest in personal property is a
                                                                      key way to ensure priority of the interest. Priority,
In 2009, the Commonwealth Parliament passed the PPS                   as used in the PPS Act, refers to the order of
Act.                                                                  precedence for determining which creditor has
                                                                      the right to be paid first in the case of the default
The PPS Act sets out rules relating to the priority and
                                                                      or bankruptcy of the debtor.
enforcement of security interests in personal property and
creates a new national PPS Register on which security                 RETENTION OF TITLE
interests in personal property can be recorded.
                                                                      Sometimes property is sold or leased on the
PPS reform will allow SFRs to be pledged as security for              basis that the purchaser takes the property but
loans which in turn, should make loans easier to acquire,             legal ownership, or title to the property, remains
facilitate expansion of fishing businesses and help to                with the seller until the financial arrangement is
address the concerns of the finance industry in taking                concluded.
security in these licenses.
                                                                      Under the PPS Act these types of arrangements
WHAT IS PERSONAL PROPERTY?                                            create a security interest in the property sold or
leased. As a result, a seller’s (or lessor’s) rights in the
property may be at risk if the security interest is not
registered on the PPS Register. Terms of supply
agreements and leases may need to be reviewed by
                                                                    WHAT WILL IT COST?
business owners or their business advisors to determine
whether they are in accord with the PPS Act.                        Each search of the PPS Register which shows no
                                                                    security interest will provide protection under the
                                                                    PPS Act. You will be able to print a search
Importantly, the PPS Act provides in certain circumstances          certificate for each search result at no additional
that a buyer of property will take it free of any security          cost. All searches are subject to a fee (expected to
interest; that is, it is unencumbered. For example, where           be less than $4.00).
the property is purchased for personal, domestic or
                                                                    The current ‘peace of mind’, fee free - yes/no -
household purposes and its market value is $5000 or less.
                                                                    enquiry service provided by some existing
In regard to motor vehicles and watercraft which must be            encumbrance registers is not available under the
registered by serial number, a failure to register by the           PPS Register.
relevant serial number may result in a purchaser taking the
                                                                    PPS REGISTER CREDIT ACCOUNT
property free of any security interests in that property. In this
instance the PPS Register will operate in a similar way to          If you wish to apply for a credit account to use the
state and territory based vehicle security interest registers,      PPS Register, the form is now available on the
such as REVS.                                                       PPS website. While you can also pre-pay or pay
                                                                    as you go, if you are a regular user, you may find it
                                                                    useful to establish a credit account. Please submit
In addition to the Commonwealth Fishing Register, the PPS           your completed form early to ensure you can use
Register will replace the Commonwealth Shipping Register,           your credit account from the ‘go live’ date of the
the ASIC Register of Company Charges and most state and             register.
territory registers of security interests in personal property,
                                                                    PROFESSIONAL ADVICE RECOMMENDED
including registers of interests in motor vehicles, such as the
VSR in Victoria or REVS in NSW.                                     PPS reform may affect you and your business in a
                                                                    number of different ways. Seeking professional
The PPS Register should be searched to find out about
                                                                    advice in relation to the specific issues affecting
existing security interests to ensure that if buying or selling
                                                                    your business is recommended.
personal property such as a SFR or watercraft that there is
clear title.                                                        You can view a video about PPS reform on the
                                                                    PPS website:

When the PPS Register commences, you will be able to
access it online at or by calling the                                                      August 2011
contact centre. The contact centre telephone number is
1300 007 777 and will be available during business hours.

For SFRs you will need to search by grantor details.


A grantor is an individual or organisation who grants a
security interest over personal property to a secured party.
This includes using your personal property as security for a
loan, such as a secured car loan. If you lease equipment or
acquire supplies on retention of title basis, this may affect

Shared By: