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Update on the Personal Property Securities Act

2012-11-12

The Personal Property Securities Act 2009 (Cth) commenced on 30 January 2012.  Andrew Bini shares some insight in relation to the migration of security interests and the release of those security interests under the new Register.

The Personal Property Securities Act 2009 (Commonwealth) commenced on 30 January 2012.  The Act established a system of registration of security interests in certain non-land personal property called the Personal Property Securities Register.

The following are two issues arising since the Act came into operation.

At the commencement date security interests registered on transitional registers, such as ASIC's register of charges, were migrated to the new register.  Since the commencement date, ASIC has reported that 6000 ASIC registered charges were not successfully migrated to the new register.  Consequently, if you hold security over a company in the form of a pre-existing ASIC registered charge you must not assume that charge has been successfully migrated.  You will need to determine with ASIC the status of your pre-existing ASIC registered charge.

With regard to the release of migrated ASIC registered charges, the old ASIC Form 312 release documentation can no longer be used.  Instead, the holders of security interests registered on the new Register must register a Financing Charge Statement on the new Register to release the security interest. 

To facilitate the release of security interests in the settlement of the sale and purchase of assets, the Australian Bankers Association and Australian Finance Conference have prepared an industry standard release document entitled Release and Undertaking to Amend Registration which is becoming widely accepted as the means of releasing security interests.  The undertaking requires the holder of the security interest to register a Financing Charge Statement within a short period following settlement.

If you have any queries relating to this content please contact Andrew Bini atabini@richbenn.com.au.

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