- 29.1 Summary of key changes to the previous law
- 29.2 Security agreements are not available from the PPS Register
- 29.3 Super-priority security interests – PMSIs and security interests perfected by control
- 29.4 Secured parties can perfect to defeat existing security interests of which they have knowledge – knowledge is generally not relevant to priority disputes between security interests
- 29.5 45 day window to register security interests changes to 20 business days
- 29.6 Security interests over ADI accounts
- 29.7 Following collateral upon transfers
- 29.8 Extinguishment rules upon transfers of collateral
- 29.9 Security interests automatically attach to proceeds generated upon disposals of original collateral
- 29.10 Restrictive covenants against the sale of collateral or the grant of further security
- 29.11 Receivables financing
- 29.12 Tacking of further advances is permitted
- 29.13 Conflicts of laws rules
- 29 14 Serial numbered property
- 29.15 15 business day “silent equipment PMSI” risk
- 29.16 Receivers, controllers or secured parties can sell leased or retention of title property if the lease or retention of title transaction is unperfected, or trumped for priority
- 29.17 Circulating security interests (floating charges) attach immediately to after-acquired property without appropriation
Under the pre-PPSA company charges system under Chapter 2K of the Corporations Act 2001 (Cth) there was a 45 day window within which to register company charges to prevent them being void against a liquidator or administrator appointed to the grantor.
Under the PPSA there are certain “deadlines” by which “purchase money security interests” (PMSIs) must be perfected. Equipment PMSIs must be registered within 15 business days of supply (goods) or attachment (other equipment). Inventory PMSIs must be registered before supply (goods) or attachment (other inventory). “Normal” security interests are not subject to such deadlines.
However, a new section 588FL is to be inserted into the Corporations Act 2001 (Cth) upon the implementation of the PPSA. Section 588FL means that where security interests are perfected by registration only and were granted within six months of an administration or liquidation of the grantor, they will be void if not registered within 20 business days of grant.
Put another way, there is a six month hardening period for security interests perfected by registration only, if they are not registered within 20 business days.
Secured parties should not take this hardening risk, because it can be easily avoided by registering within 20 business days of grant.
The practice of registering security interests under the PPSA in Australia will almost certainly change to registering within 20 business days of grant. See Chapter 17 (Perfection) for discussion.
