Overall, we welcomed and supported the proposed reforms to the Personal Property Securities (PPS) framework. The reforms proposed implement the majority of recommendations from the Whittaker Review which was undertaken in 2015.

Our feedback offered further suggestions to improve accessibility for infrequent users and for grantors. A grantor is the party that owns an asset over which a third party, such as a bank, has registered their interest in under the PPS framework. The registration makes the third part a secured party who can claim the asset if the grantor is unable to meet their obligation, such as loan payments.

Dealings in collateral

We strongly supported removal of the requirement to ‘tick’ the Purchase Money Security Interest (PMSI) checkbox when making a registration.

Currently, secured parties are required to indicate if their registration is a PMSI to be the first in line to claim the underlying asset. If the secured party fails to tick this box, or ticks the box when it is not a PMSI, that registration does not simply move down in priority but is rendered invalid. We consider the impact, rendering a registration invalid, is disproportionate to the cause, an administrative error.

Ending a registration

We strongly supported the proposed new Part 5.6 which will simplify and expediate ending a registration.

Currently, only a secured party can remove their registration in the PPS framework. If a secured party fails to do so when the a registration has become obsolete, it can months or years for a grantor to have the registration removed. The propose new process will allow the grantor to request removal by the secured party and if they fail to take action, the grantor can submit that request to the Registrar who may then remove the registration.

Transitional arrangements

Of the alternatives proposed, we supported transition through temporary perfection.

We considered that the alternative, grandfathering, would increase the complexity of an already complex regime and mitigate any benefits the reforms aim to achieve.

Conclusion

We welcomed the proposed reforms as we consider they will make the PPS framework more accessible for infrequent users and address the imbalance of power currently held by secured parties.

We thank our members for their contributions to this submission.