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PPSR: Amendments on the Horzion

2 Minute Read
Written by Paul Miller
20 February 2024

One of the things that was introduced along with the PPSA well over a decade ago, was a requirement that it be subject to an official review after 3 years of its operation – primarily to assess its effects on both Australian businesses and consumers as well as the potential for implementing efficiencies and greater simplification.

This review was carried out by Bruce Whittaker and submitted to Government in March 2015.

For those who have struggled with much of the new terminology introduced by the PPSA (Secured Party Groups, Giving of Notice Identifiers, Purchase money security interests etc), it will come as no surprise that, amongst the review’s 394 recommendations, many were proposing greater streamlining and simplification.

Jump forward to the latter part of 2023 and we finally get the Government’s formal response to Bruce Whittaker’s review.

While it is tempting to moan about the length of time this has taken, it is important to point out that, rather than watering down the Whittaker recommendations or putting them to one side, the overwhelming majority of changes proposed by the review have been accepted by the Government and placed front and centre in plans to overhaul the operation of the PPSA and its Register.

Under the Government’s proposed legislation, no longer will there be any requirement to identify if a security right qualifies as a ‘PMSI’ or not, no longer any need to flag the customer’s use of your goods as ‘inventory’ or circulating assets, nor would there be any need to worry if a buyer should be identified by their corporate ACN or by the ABN of any trust on behalf of which they may be acting; all areas prone to errors we see when suppliers lodge registrations on the PPSR – ones that call into question the effectiveness of the registration.

However, it has been 12 years since the PPSR was unleashed on the country and we are approaching 9 years since Bruce Whittaker submitted his recommendations.  A lot has changed in the intervening time, a lot of people have become accustomed to the manner in which the Register operates, indeed a number have made something of a name for themselves by developing an expertise in matters relating to the Register’s ‘idiosyncrasies’.  Is the simplification that everyone was crying out for a decade ago, still required or has time dragged us kicking and screaming into greater familiarity and are its, once-considered, unnecessary requirements now helpful additional detail?

At NCI we seem to be spending just as much time explaining the operations of the PPSR as we did 10 years ago and while our introduction of registration templates has clearly improved the accuracy of registrations by our clients, mistakes are still being made by suppliers when it comes to protecting their security rights.

While there may well be some scope for maintaining some of the Register’s existing refinements this should not come at the expense of improving its accessibility.  Lodging a registration should be a relatively straightforward administrative task, part of the day-to-day process of opening a credit account for a new customer, the more this can be simplified, the more the potential for errors can be reduced, the better for everyone.

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