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Personal Property Securities Amendment (Registration Commencement) Bill 2011

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2010 - 2011

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

PERSONAL PROPERTY SECURITIES (REGISTRATION

COMMENCEMENT) BILL 2011

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by the authority of the Attorney-General,

the Honourable Robert McClelland MP)



 

PERSONAL PROPERTY SECURITIES (REGISTRATION COMMENCEMENT) BILL 2011

OUTLINE

The Personal Property Securities legislation will rationalise the current Commonwealth, State and Territory laws on securities in personal property.  It will create one single national set of rules and a single national online register.  There will be one comprehensive law with clear rules governing the validity, priorities, enforcement and extinguishment of security interests in all personal property.

This Bill will amend the Personal Property Securities Act 2009 (PPS Act) to ensure that the operative provisions will not automatically commence before the single national online register can be made available for public use.

The amendments are contained in Schedule 1 to the Bill.

The Bill amends the definitions of migration time and registration commencement time so that the Attorney-General (as the relevant Minister under the PPS Act) may determine a time other than the automatic times in the PPS Act. 

If the Minister does not make a determination, the migration time will be the first day of the month which is 25 months after the month in which the Act received the Royal Assent, and the registration commencement time will be the first day of the month which is 26 months after the month in which the Act received the Royal Assent.  The Act received the Royal Assent on 14 December 2009, which means the migration time and the registration commencement time must be no later than 1 January 2012 and 1 February 2012, respectively. 

Without the amendments, the Attorney-General may determine an earlier time for both the migration time and the registration commencement time .  However, the Attorney-General could not determine a later time.

The online register is a significant component of the new PPS reforms, and it is not possible for the PPS Act to commence operating without the online system.  The ability to determine the commencement of PPS reform is required to manage the risk that issues might arise with the online system in the final weeks before the times prescribed in the legislation.  PPS reform is integral to secured lending, and the Government considers it is important to ensure that stakeholders have confidence that the online register will operate effectively.  The ability to precisely determine the commencement date will also ensure that industry and users are ready for the new national scheme.

Data migration and preparatory registration are also key components of PPS reform, and the system must be stable to ensure a seamless transition from the existing situation to the new PPS regime.

The amendments would assist Government in working with stakeholders to maximise the benefits of the implementation of significant law reform, which includes the launch of a new online system for registering security interests and searching.  They will do this by



enabling the Attorney-General to determine a time for the PPS system to commence operating at a time other than the current automatic timeframes provided for in the PPS Act.  That time could be earlier or later than the current default timeframes.

Any decision by the Attorney-General under the proposed amendments to determine the migration time and the registration commencement time to be dates after 1 January 2012 and 1 February 2012 respectively would need to be made before those dates are reached. 

The amendments do not alter the way in which a determination is made under section 306 of the PPS Act.  A determination by the Attorney-General is a legislative instrument that is not subject to disallowance.  Accordingly, Parliament, industry and users will have certainty in relation to the timing of commencement of PPS reform.

The amendments do not change the current situation where the Attorney-General can further determine the registration commencement time after the migration time .  This enables the Attorney-General to manage any additional issues or risks that might arise at a late stage in the process in the lead-up to commencement of PPS reform.

FINANCIAL IMPACT STATEMENT

There is no direct financial impact on Government revenue from this Bill.



NOTES ON CLAUSES

Clause 1: Short title

1.       Clause 1 is a formal provision specifying the short title of the Bill.  It provides that when the Bill is enacted, it is to be cited as the Personal Property Securities (Registration Commencement) Act 2011 .

Clause 2: Commencement

2.       This clause provides for the commencement of the proposed amendments.  

Clause 3: Schedule s

3.       This is a formal clause that enables Schedules to amend an Act.  It provides that each Act that is specified in the Schedule is amended or repealed as set out in the applicable items in the Schedule, and that any other item in a Schedule has effect according to its terms.  The Bill contains one Schedule.



SCHEDULE 1 - Amendments

Items 1, 2, 6 and 7

4.       These proposed amendments are consequential to the amendments in items 3, 4 and 5.

Items 3, 4 and 5

5.       These proposed amendments amend section 306 of the PPS Act so that the Attorney-General (as the relevant Minister under the PPS Act) may determine ‘another time’ for the migration time and the registration commencement time .

6.       Currently the Attorney-General may determine an earlier time than the times prescribed in paragraphs 306(1)(a) and 306(2)(a), but could not determine a time later than the times prescribed.  The amendments will mean that the Attorney-General will be able to determine times for the migration time and the registration commencement time which may be earlier or later than the prescribed times. 

7.       If the Attorney-General decides to make a determination for a later time, the determination would need to be made before the prescribed times in section 306.

8.       The amendment to subsection 306(4) is consequential to the other amendments to section 306.  It ensures that the Attorney-General can further determine a time for the registration commencement time after the migration time in the event that the Attorney-General determines ‘other times’ for both the migration time and the registration commencement time .