18 Jun 2009

Personal Property Securities Reform Update

Many of you will recall that in previous Alerts we have advised you regarding the proposed adoption of wide ranging reforms to personal property securities law in Australia.

In order for the Commonwealth Government to pass its proposed personal property securities legislation, it needs the States to refer certain powers to it. New South Wales has been the first State to pass the necessary referral legislation, with the Personal Property Securities (Commonwealth Powers) Act 2009 being passed yesterday. That Act is now awaiting assent. When that Act receives assent, the Commonwealth Parliament may pass its legislation without waiting for any other State to pass referral legislation. At this stage, we do not know the timing for the other States to introduce the referral legislation or for the Commonwealth to introduce the substantive PPS legislation.

The New South Wales Act attaches a copy of the form of the Commonwealth legislation. We are currently analysing the changes between the terms of that legislation and the last draft previously made available to the public and subjected to review by the Senate Standing Committee on Legal and Constitutional Affairs. Given that the Senate Standing Committee recommended significant changes to the earlier draft legislation we expect that there will be a number of changes as compared to the earlier draft legislation. We will issue another Alert in relation to the changes made once our review is completed.

As the referral legislation has now been passed in New South Wales there is very little scope (if any) for any further amendments to be made to the substantive PPS legislation before it is passed by the Commonwealth Parliament.

You will also recall from reading our March 2009 Alert that the proposed commencement date for the new legislation was May 2010. While the Senate Standing Committee in its 19 March 2009 report recommended that the implementation date be extended by at least 12 months, the Commonwealth Government has not advised whether this date will change. We will issue another Alert as soon as any further information on the commencement date becomes available.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.