Personal property securities laws kick off

The new Personal Property Securities Register begins from the end of January 2012. Businesses are being advised to become as familiar as possible with the changes to avoid missing out on having their interests in securities properly registered.

Experts have warned SME’s that any business supplying goods should be aware that the new register replaces several state- based registers.

A personal property security is when a secured party takes an interest in personal property as security for a loan or other obligation, or enters into a transaction that involves the supply of secured finance. Some of these examples include:


  • A person borrowing money from a bank and offering the bank collateral or security for the loan – the bank’s interest over the collateral is personal property security. Retention of title clauses for the sale of goods (‘Romalpa’ clause).


Personal property is any form of property, other than land, buildings or fixtures, which form part of the land. It can include tangible assets such as cars, art, machinery and boats, as well as intangible assets such as intellectual property and contingent rights and financial assets such as shares.

The personal property security (PPS) reform brings the different Commonwealth, State and Territory laws and registers regarding security interests in personal property under one national system. PPS reform introduces the Personal Property Securities Act 2009 and a single online PPS register. The model is based on the same models currently being used in Canada and New Zealand.

Those that register will be treated as a secured creditor, as opposed to an unsecured creditor, if a debtor falls into insolvency. The PPS register will allow lenders and businesses to register their security interest. Secured parties, buyers and other interested parties can search the PPS register to find out if a security interest is registered over the personal property.

As a result of the PPS reform, a number of existing Commonwealth, State and Territory personal security registers will close. Existing transactions involving mortgages and charges which have been registered with the Australian Securities and Investments Commission (ASIC), will be migrated automatically across to the new Personal Property Securities Register. Security interests which are currently registered on those registers will generally be migrated to the national register.

Businesses and individuals will need to:


  • Review their business arrangements between group entities;
  • Update their terms of supply;
  • Review their financing arrangements and contracts;
  • Identify any transactions which need to be registered;
  • Update their procedures for making new transactions;
  • Ensure that registered security interests do not exceed expectations;
  • Determine the assets that will be affected by the new laws;
  • Update their existing arrangements, not currently considered to be security interests, and ensure that they are registered.


Businesses and individuals with ownership of an affected security interest, and those that use retention of title arrangements

in their business operations, should seek professional advice now.

Failing to understand and allow for these new laws may result in a loss of assets.

It is advisable that you confirm that all your interests have been registered.