The Personal Property Securities (Corporations and Other Amendments) Bill 2010 has been passed by Parliament. Under PPS reform, non-real property security interests will be registered in the PPS Register even if they are given by companies.
The Bill includes provisions which:
- replace the Register of Charges under Chapter 2K of the Corporations Act with the PPS Act register of security interests in personal property but retain provisions equivalent to sections 266 and 267 in Chapter 2K (which provide that charges are void against an administrator or liquidator in certain circumstances);
- amend the terminology of the Corporations Act that deal with charges in line with the PPS functional approach. Currently, only transactions which create charges or mortgages are security agreements under the Corporations Act. But the PPS Act uses a functional approach of treating alike transactions which have the same effect of securing the payment or performance of an obligation. These security interests would, therefore, also be included as PPSA security interests in the Corporations Act.
- extend the Corporations Act concept of property to include PPSA retention of title property
- change references to floating and fixed charges to circulating and noncirculating charges respectively but with the intention of maintaining existing rights, for example, employee preferences under CA, section 561.
- make the PPS Act consistent with existing State and Territory provisions on the enforcement of security interests in agricultural products (Chapter 6).
- provide appropriate transitional and application arrangements.
