Personal Properties Securities Register: An Update
The Personal Property Securities Act (“PPSA”) commenced on 30 January 2012 and dramatically altered the way individuals and businesses deal with personal property and the way in which they need to protect their interests in personal property. As part of the reform, a new register called the Personal Property Securities Register (“Register”) came into existence on 30 January 2012. At this time, existing registered security interests were “migrated” from the existing Federal, State and Territory registers (for example ASIC company charges, REVS, Bills of Sale) to the Register.
Two months have passed since the Register came online, but there have been significant problems with the Register and the migration process. It is essential to understand these problems if you are attempting to search the register for security interests registered against a particular company, as the register may not produce accurate results.
SOME REGISTRATIONS DID NOT TRANSFER
The Australian Securities and Investment Commission (ASIC) recently confirmed that 6,084 registrations relating to companies did not migrate to the Register. This means that searching the register may wrongly reveal that a company does not have any security interests registered against it, when in reality it does. ASIC are currently in the process of notifying the relevant secured parties to enable them to re-register those interests.
MULTIPLE SEARCHES OF THE REGISTER ARE REQUIRED
Although touted as one of the main advantages of the Register, the need to only search the register once has failed to become a reality, due to almost one million ASIC registrations migrating according to the company’s ABN instead of according to their ACN. For migrated registrations where the party possessed both an ACN and an ABN, this means the Register must be searched not only twice, but three times (by ACN, ABN and the party’s name) to ensure all relevant interests are found.
SATISFIED CHARGES HAVE BEEN RE-REGISTERED
Many ASIC charges that had been discharged (paid out) long before 30 January have migrated over to the Register as current security interests. This is obviously a problem for those searching the Register and finding security interests registered against a party that no longer exist. If you seek finance, your bank may see interests that you paid out long ago.
THE SUM OF IT
These mistakes with the Register may have ongoing effects and they serve to highlight the importance of conducting a review of your business’ security interests in light of the PPSA. If you have an interest in an asset (other than land) that was previously secured by a company charge, you should particularly consider obtaining advice on whether these migration issues affect your interest in that asset.