CHAPTER 1

Introduction

Purpose of the Bill

1.1        On 3 November 2011, the Senate referred the provisions of the Personal Property Securities Amendment (Registration Commencement) Bill 2011 (Bill) to the Legal and Constitutional Affairs Legislation Committee (committee) for inquiry and report by 21 November 2011.[1] The Bill was introduced into the Senate on 3 November 2011 by Senator the Hon. David Feeney, Parliamentary Secretary for Defence.[2]

1.2        The Bill will implement a fourth suite of consequential amendments to the Personal Property Securities Act 2009 (PPS Act). The PPS Act establishes a comprehensive, national personal property securities (PPS) regime, a critical component of which is the creation of a single online register to record personal property that is or may be subject to a security interest (PPS Register).[3] Neither the PPS Act nor the PPS Register has commenced operation.

1.3        As noted in the Second Reading Speech, the PPS Register will replace existing Commonwealth, state and territory registers which record personal property security interests.[4] Accordingly, the PPS Act also provided for the migration of data from these registers to the PPS Register.[5]

1.4        The primary purpose of the Bill is to amend the PPS Act 'to ensure that [its] operative provisions will not automatically commence before the [PPS Register] can be made available for public use'.[6]

Provisions of the Bill

1.5        To this effect, the Bill proposes to amend two key concepts contained in the PPS Act: 'migration time' (which is the date on which agencies in charge of existing Commonwealth, state and territory registers would start to transfer data to the PPS Register);[7] and 'registration commencement time' (which is the date on which the PPS Act would start to apply to certain matters).[8]

1.6        Current subsections 306(1) and 306(2) of the PPS Act provide, respectively, a mechanism by which the 'migration time' will be 1 January 2012 and a mechanism by which the 'registration commencement time' will be 1 February 2012, unless the Attorney-General determines earlier such times.[9] At present, the operative provisions of the PPS Act must therefore commence no later than 1 February 2012.

1.7        The key provision of the Bill amends current paragraphs 306(1)(b) and 306(2)(b) to replace the phrase 'an earlier time' with the words 'another time' (item 3 of Schedule 1). The proposed amendment would allow the Attorney-General to determine dates for the 'migration time' and 'registration commencement time' which are either earlier or later than the times prescribed in the PPS Act.[10]

1.8        The Bill also proposes to amend current subsection 306(4). The current provision enables the Attorney-General to make a second determination in respect of the 'registration commencement time', which must be after the 'migration time', provided that the Attorney-General has already determined 'earlier times' for both the 'migration time' and the 'registration commencement time'. The Bill will replace 'earlier times' with the words 'other times' (item 4 of Schedule 1) as a consequence of the amendments contained in item 3 of Schedule 1.

1.9        The Explanatory Memorandum explains:

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.[11]

1.10      The Bill also makes consequential amendments to the PPS Act (items 1, 2 and 6 of Schedule 1) and the Personal Property Securities (Corporations and Other Amendments) Act 2010 (item 7 of Schedule 1).

Conduct of the inquiry

1.11      Details of the inquiry, the Bill and associated documents were placed on the committee's website. The committee also wrote to 54 organisations and individuals, inviting submissions by 9 November 2011.

1.12      The committee received eight submissions, which are listed at Appendix 1. All submissions were authorised for publication and are available on the committee's website at https://www.aph.gov.au/senate/committee/legcon_ctte/index.htm. The committee did not hold any public hearings for the inquiry.

Scope of the report

1.13      Chapter 2 discusses the key issues raised in submissions, as well as providing the committee's conclusions and recommendations.

Note on references

1.14      References in this report are to individual submissions as received by the committee, not to a bound volume.

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