Personal Property Securities Amendment Regulation 2012 (No. 1)

Administered by Attorney-General's Department

Legislation au F2012L01404 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Select Legislative Instrument 2012 No. 121

Issued by the authority of the Attorney-General

Personal Property Securities 2009

Personal Property Securities Amendment Regulation 2012 (No. 1)

Section 303 of the Personal Property Securities Act 2009 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

The Act provides for a single national law creating a uniform and functional approach to personal property securities. It establishes uniform rules for creating a valid security interest, provides coherent rules governing the priority between competing security interests (and other interests), establishes when a person acquires personal property free of a security interest and streamlines the enforcement of security interests. 

The Act is supported by a single national online register of personal property securities (the PPS Register).  The PPS Register replaced a confusing array of both electronic and paper-based national, State and Territory registers of personal property securities.

The additional regulation amends the Personal Property Securities Regulations 2010 to prescribe carbon units issued under the Clean Energy Legislation, Australian carbon credit units issued under the Carbon Farming Initiative, and certain eligible international emissions units issued in accordance with the Kyoto rules as ‘investment instruments’ under the Act.

Details of the regulation are set out in the Attachment.

Constitutional authority for the Act is partly based on a referral of power from the States and Territories. The Personal Property Securities Law Agreement 2008 provides that the Commonwealth may not make certain regulations without approval from the State and Territory parties. However, the regulation does not require approval as it relates to matters for which the Commonwealth may legislate without approval from the States and Territories.

The regulation was prepared in consultation with the Department of Climate Change and Energy Efficiency and the Department of the Treasury. The regulation is consistent with the treatment of the carbon and emissions units as ‘financial products’ for the purposes of the Corporations Act 2001 and removes ambiguity that was previously raised in stakeholder forums regarding how the units would be treated under the Act.

The Act specifies no other conditions that need to be satisfied before the power to make the regulation may be exercised.

The regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.


ATTACHMENT

Details of the Personal Property Securities Amendment Regulation 2012 (No. 1)

Section 1 – Name of Regulation

This regulation provides that the title of the regulation is the Personal Property Securities Amendment Regulation 2012 (No. 1).

Section 2 – Commencement

This regulation provides for the regulation to commence on 1 July 2012.

Section 3 – Amendment of Personal Property Securities Regulations 2010

This regulation provides that Schedule 1 amends the Personal Property Securities Regulations 2010.

Schedule 1 – Amendments

Items 1,2,5 and 6  – Subregulations 1.4(1A),(1B),(1C),(2)

This is a minor technical amendment to ensure consecutive numbering of the regulations.

Items 3 and 4 – Subregulation 1.4(1C)

These are minor technical amendments that more clearly state that it is the interest granted by the grantor within the meaning of the Act that is the interest to which the Act does not apply.

Item 7 – Regulation 1.10

This item inserts a new regulation.

The following units are declared as personal property under their respective legislation and therefore personal property for the purposes of the Act:

  • A ‘carbon unit’ within the meaning of the Clean Energy Act 2011;
  • An ‘Australian carbon credit unit’ within the meaning of the Carbon Credits (Carbon Farming Initiative) Act 2011;
  • An ‘eligible international emissions unit’ mentioned in paragraphs (a), (b), (c) and (d) of section 4 of that definition in the Australian National Registry of Emissions Units Act 2011 (the ANREU Act).  (Each unit is also a ‘Kyoto unit’ as defined in section 4 of the ANREU Act.  A’ Kyoto unit’ registered in an Australian National Registry of Emissions Units account is personal property for the purposes of the Act.)

This regulation prescribes each of those units as being an ‘investment instrument’ in section 10 of the Personal Property Securities Act 2009.  This regulation is consistent with the treatment of those units as ‘financial products’ for the purposes of the Corporations Act 2001.

Item 8 – Amend Part 2.2(2), Schedule 1 of PPS Regulations

This is a minor technical amendment to correct an incorrect cross-reference.

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Personal Property Securities Amendment Regulation 2012 (No. 1)

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Legislative Instrument is to identify Australian carbon credit units issued under the Carbon Farming Initiative, eligible international emissions units issued in accordance with the Kyoto rules and carbon units issued under the Clean Energy Legislation, as investment instruments for the purposes of the Personal Property Securities Act 2009.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Nicola Roxon

Attorney-General

 

Overview

The Personal Property Securities Amendment Regulation 2012 (No. 1) was enacted to address the need for clarity and consistency in the treatment of specific carbon and emissions units under the Personal Property Securities Act 2009. This regulation was issued by the authority of the Attorney-General, with the aim of aligning the treatment of these units with their classification as 'financial products' under the Corporations Act 2001, thereby removing ambiguity that had previously been raised in stakeholder discussions. The regulation was developed in consultation with relevant departments and is consistent with the broader legislative framework governing financial products. It ensures that carbon units, Australian carbon credit units, and eligible international emissions units are recognised as investment instruments under the Act, thereby facilitating a uniform and functional approach to personal property securities. This regulatory amendment is part of the ongoing effort to streamline and modernise the national system for personal property securities, supported by the single national online register known as the PPS Register.

Scope and Application

The Personal Property Securities Amendment Regulation 2012 (No. 1) pertains to entities and individuals engaged in the trading or financing of carbon units, Australian carbon credit units, and eligible international emissions units under Australian legislation. This includes those who issue, hold, or transfer these units as part of their business activities, particularly those involving secured financing. The regulation extends to the entire Commonwealth of Australia, aligning with the unified approach to personal property securities as established by the Personal Property Securities Act 2009. The Act itself applies to the creation, enforcement, and registration of security interests in personal property, including the aforementioned units, which are now recognised as 'investment instruments'. The regulation ensures that these units are treated consistently with their status as 'financial products' under the Corporations Act 2001, thereby avoiding previous ambiguities. There are no specific exclusions or thresholds mentioned in the regulation, although the application of the Act generally depends on the nature of the transaction and the classification of the involved property. The regulation does not require state or territory approval as it pertains to matters within the Commonwealth's legislative authority, thus ensuring a streamlined and coherent legal framework for these specific units.

Key Provisions

The Personal Property Securities Amendment Regulation 2012 (No. 1) introduces significant changes to the Personal Property Securities Regulations 2010. The key operative sections of the Amendment Regulation are Sections 1 through 8, which primarily focus on the amendment of the regulations to include specific carbon units as investment instruments under the Personal Property Securities Act 2009. Section 1 provides the title of the regulation, while Section 2 sets the commencement date as 1 July 2012. Section 3 details the amendments to the Personal Property Securities Regulations 2010, which are outlined in the Schedule 1 of the Amendment Regulation. The Amendment Regulation imposes specific obligations on the parties involved in transactions involving the newly classified investment instruments. For example, it requires that these carbon units and emissions units be registered in the Personal Property Securities Register, thereby ensuring that they are treated as personal property for the purposes of the Act. Additionally, the regulation mandates that all relevant transactions be conducted in accordance with the uniform rules established under the Act, providing a consistent approach to the creation, priority, and enforcement of security interests in these instruments. Failure to comply with the provisions of the Amendment Regulation may result in various consequences. The Act itself does not specify particular offences, penalties, or consequences for breach of the regulations; however, the overarching legal framework under which the Act operates may impose sanctions. For instance, under the Legislative Instruments Act 2003, non-compliance with a legislative instrument could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. Additionally, parties involved in transactions that do not adhere to the requirements set forth in the Amendment Regulation may face legal challenges in enforcing their security interests or may be subject to claims from other creditors or stakeholders. Moreover, given the integration of these units with the broader financial regulatory environment, breaches of the Amendment Regulation could also attract penalties under other related legislation, such as the Corporations Act 2001. For example, misclassification or improper handling of these investment instruments could be viewed as breaches of financial product regulations, potentially leading to substantial fines and other regulatory actions. While the maximum penalties are not explicitly stated in the Amendment Regulation itself, they would be determined based on the specific provisions of the relevant Acts and the nature of the breach.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.