Migration of existing interests to the PPSR
As the Personal Property Securities Register (“PPSR”) finally came into effect on 30 January 2012, it is now essential for businesses to consider some of the practical issues associated with the new register. One of these issues is the compulsory and automatic migration of security interests from existing registers and onto the PPSR.
Interests on most existing registers have been automatically migrated across to the PPSR. However, there is the possibility that the information for each individual security interest may not have been migrated accurately.
It is important, therefore, that all interested parties participate in the PPSR’s “Find and Claim” process whereby they may search the migrated information online. Parties may search the “secured party groups” and the associated information which have been created as a result of the migration process and then check this information and correct it if necessary.
They will then need to transfer the registrations from those migrated “secured party groups” to a new secured party group they have created to manage their registrations on the PPSR.
If, for example, you previously had charges registered over companies to protect your interests we recommend that you create an account with the PPSR to access the “Find and Claim” process.
How the PPSR works
The PPSR differs from previous registers in the simplicity of documentation which is required to be lodged. Secured parties need only to register a Financing Statement online and pay a lodgement fee in order to register their interests.
The Financing Statement will require the following information:
1. Details of the secured party.
2. Details of the grantor (owner).
3. Details of the giving of notices.
4. Description of collateral and proceeds.
5. The end time for registration.
6. Details of subordination (not mandatory).
7. Whether the security interest is to be a Purchase Money Security Interest.
Secured parties must have reasonable grounds to register a security interest and the application must not be frivolous, vexatious, offensive or contrary to public interest.
We recommend that secured parties register a Financing Statement prior to completing a transaction with the grantor and handing over possession of any collateral (goods).
Registration of a security interest with the PPSR is critical with respect to determining priorities between secured parties and the significance of a security interest on insolvency.
Atkinson Vinden Lawyers understands the importance of your business becoming PPSA compliant. Please contact Senior Associate, Anne Goodrick on (02) 9411 4466 if you would like assistance in this area.