Introduction
This briefing follows our previous legal updates on the Personal Properties and Securities Act(Cth) 2009 (the PPSA) circulated to you on 08 September 2010, 17 February 2011 and July 2011.
PPSA will affect not just financiers. It will have an impact on a wide range of businesses.
Start date delayed
The proposed 31 October 2011 start date has been delayed.
On 2 September 2011 the Commonwealth Attorney General's department sent out a notification by email that the registration commencement time of the Personal Property Securities Act 2009 (PPSA) on 31 October 2011 is not achievable.
According to the notification, it is now targeting a date "before 1 February 2012". No specific start date has been announced.
When is the latest date that the PPSA can start?
The latest start date that can occur under the current PPSA is 1 February 2012.
Under section 360 of the PPSA, the registration commencement time is the start of the first day of the month that is 26 months in which the PPSA was given Royal Assent or an earlier time determined by the Minister. The PPSA received Royal Assent on 10 December 2009 which will make the latest start time 1 February 2012.
It had originally been expected that the Australian government and industry would be ready for PPSA well before 1 February 2012 and that the Minister would make a determination of an earlier date. Indeed the first target date was May 2011. However, there were a number of system related issues that caused the current delay.
Practical issues with 1 February start date
The Attorney General's department recognises that there will also be practical issues with a 1 February 2012 registration commencement time, bearing in mind holiday periods. At its Business Process and IT User Forum meeting on Friday (2 September 2012) it indicated that the user acceptance testing and end to end testing for data migration must be finalised to an acceptable level before commencement is feasible.
Can the latest start date be extended beyond 1 February 2012?
The latest start date on 1 February 2012 cannot be extended beyond 1 February 2012 unless the PPSA is amended.
As the introduction of the national personal property registration system was a Council of Australian Governments' initiative, the Commonwealth, State and Territory governments must first agree to a change of date. According to the Personal Property Securities Law Agreement signed on 2 October 2008 any alteration to the PPSA requires the Commonwealth to consult with the State and Territory parties and any proposals for amendment must be notified to the other parties to ensure they have the opportunity to comment on the proposed amendments. This would include any extension of the start date beyond 1 February 2012.
Once the parties have consulted under the relevant agreement, Commonwealth Parliament must pass amending legislation to the PPSA. However there are relatively few sitting days of the Commonwealth Parliament left before the end of 2011.
Effect of a later start date
We have been working hard on amending and redrafting client documents during the course of this year to ensure that documents are "PPSA compliant" by the registration commencement time.
There are still a number of issues that need to be resolved. We expect that the additional time will enable further representations to be made to the Attorney General's department to address these.
We are also aware that a large number of smaller businesses do not understand the impact of the PPSA on business. For businesses that have not yet had the opportunity to fully understand and prepare for the PPSA, the delay is a welcome development.
PPSA applies to a wide range of businesses
If you would like to discuss the PPSA and possible implications for your business please contact one of our PPS team.
Further updates to follow
We will issue further updates once the precise timetable is known.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
