There has been significant activity over the last two months in relation to the upcoming Personal Property Security (PPS) laws to be introduced in Australia.

The Personal Property Securities Bill 2009 together with the Personal Property Securities (Consequential Amendments) Bill 2009 both received Royal Assent on 14 December 2009. As a result, the Personal Property Securities Bill is now an Act (PPSA).

The majority of State parliaments have passed referral legislation to facilitate the national operation of the PPSA.

The changes to the Corporations Act contemplated by the Bill are significant. Not only will these changes impact upon the amount of security that financiers will obtain from their clients, the nature of that security and their processes and procedures, they will also impact upon how insolvency practitioners deal with assets of companies subject to administration or liquidation.

PPSA is now law and will take effect sometime between May 2011 and February 2012.

The regime which is to apply is largely settled and so there is now no reason to delay implementation of the steps necessary to make your business compliant. Whether you are a bank, other financial institution or corporate, if you are involved in any form of financing of personal property (from selling goods on retention of title terms, to leasing of equipment to providing property finance which involves taking security over non-real estate assets) PPSA will impact on your business.

Failure to comply will have dramatic consequences, particularly where your borrower/security provider enters administration or is wound up.

For this reason, we strongly recommend that you seek advice as to how the regime will impact on you and start to implement an appropriate project plan.

Further details are available from Mondaq.