EXPLANATORY STATEMENT
Personal Property Securities (Search Result Data) Determination 2011
Summary
The Personal Property Securities (Search Result Data) Determination 2011 (the determination) is made under subsection 174(7) of the Personal Property Securities Act 2009 (the Act) by the Personal Property Securities Registrar.
This determination sets out data in relation to a secured party, a grantor or personal property that may be included in a search result.
Background
The Personal Property Securities Register (PPSR) is required to be established and maintained by the Registrar under the subsection 147(1) of the Act. The PPSR will replace a significant number of existing registers of securities and related interests currently administered by Commonwealth, State and Territory agencies. The introduction of a single national framework and fee structure will replace the existing fragmented, complex and inconsistent law and registration arrangements providing greater legal and financial certainty to financiers.
Accessing the PPSR to search for data in relation to a security interest or personal property and obtaining accurate search results are essential to the successful operation of the regime. A search result is intended to provide prospective users of the PPSR with notice of any security interests in a grantor’s personal property. A written search result (a search certificate) would be admissible as evidence in a court or tribunal and, in the absence of evidence to the contrary, proof of matters stated in the search result (subsection 174(1)). The written search result will generally state the data contained in any registered financing statement returned by the search; most importantly, the details required in subsection 153(1).
However, other data may be included by way of a determination by the Registrar (subsection 174(4)). This data may include third party data. The data set out in the determination is not an exhaustive list of the matters that may be stated in a search result. Search results will, of course, contain details described in any registered financing statements returned.
Notes on Sections
Section 1 – Name of Determination
Section 1 provides for the citation of the Determination as the Personal Property Securities (Search Result Data) Determination 2011.
Section 2 – Commencement
Section 2 provides that the Determination commences on the day after it is registered.
Section 3 – Interpretation
This section provides that the definition of Act is the Personal Property Securities Act 2009.
Section 4 – Search Result Data
The table in section 4 sets out data in relation to a secured party, a grantor and personal property. Data contained in the National Exchange of Vehicle and Driver Information System (NEVDIS) may be included in a search result only where a motor vehicle search is conducted. NEVDIS data is owned by Austroads Ltd and is not stored on the PPSR. The PPSR will request data via an interface from NEVDIS for a serial number and retrieve the relevant vehicle information if available. The data returned in a search result may include a number of details about a vehicle including any stolen or written off notifications against the vehicle.
An attachment file that has been included in the Register as part of a registration, or data relating to an attachment file may be included in a search result. An attachment file may be added as part of the registration of a financing statement or a financing change statement. Attachments may also be migrated from transitional registers, such as the ASIC Register of Company Charges. The data relating to an attachment may be derived from the free text description that may be included when an attachment is included in a registration. An example of what the free text description may contain would be the inclusion of a reference to a specific section in the attachment that is particularly relevant to the collateral.
The data in relation to an individual grantor that may be returned in a search result will be dependent on the collateral type. If the collateral is described as consumer property, a statement that the grantor exists, but no other information will be returned as the grantor details in the search result. When collateral is described as commercial property, a statement of the name of the grantor will be returned as the grantor details, but not the grantor’s date of birth. The data to be included in respect of individual grantors is intended to take into account the privacy of the individual.
Generally, an organisation that is a body corporate will be registered, whether as a secured party or a grantor, by an identifier other than the organisation’s name; for example, an Australian Company Number. However, a search result may also include an organisation’s name if it is verified by the Australian Business Register or the Australian Securities and Investments Commission.
Consultation
Consultation in regard to PPS reform has been extensive with the Department working closely with key stakeholders including banks, equipment financiers and information brokers. However, no specific consultation was considered necessary in respect of this determination as consultations in relation to the Personal Property Securities Act 2009 and Personal Property Securities Regulations 2010 had raised issues regarding the data to be contained in a search result. This determination reflects the outcomes of those consultations.
Regulatory Impact Analysis
The Office of Best Practice Regulation has previously advised that the personal property securities reforms do not require a Regulatory Impact Statement because the reforms do not involve compulsion and it will be a commercial decision whether businesses register. It is not designed to impose any additional compliance costs on business or individuals or have any adverse impacts on competition.
Overview
The Personal Property Securities (Search Result Data) Determination 2011, made under the Personal Property Securities Act 2009, establishes the specific data that can be included in search results from the Personal Property Securities Register (PPSR). The determination, issued by the Personal Property Securities Registrar, aims to ensure that search results provide accurate and comprehensive information to prospective users, while also considering privacy concerns. The introduction of a unified national framework through this Act sought to replace fragmented and inconsistent registration arrangements, providing greater legal and financial certainty to financiers. The policy objective is to facilitate effective and reliable searches of the PPSR, ensuring that the data returned can be used as admissible evidence in courts or tribunals.
This determination addresses the gap in the existing fragmented system by providing a clear set of rules regarding the data included in search results, balancing the need for transparency with privacy considerations. The Registrar, through this determination, has specified what information about secured parties, grantors, and personal property can be included in search results, ensuring that the data returned is both useful and legally sound.
Scope and Application
The Personal Property Securities (Search Result Data) Determination 2011, made under the Personal Property Securities Act 2009, sets out the specific data related to a secured party, a grantor, or personal property that may be included in search results from the Personal Property Securities Register (PPSR). This legislation applies to all entities and individuals involved in the registration, search, or use of the PPSR, including financiers, grantors, and secured parties, with a focus on ensuring the accuracy and completeness of search results. The PPSR is a national framework designed to replace fragmented, complex, and inconsistent state and territory laws, providing greater legal and financial certainty to financiers. The determination is applicable nationally, given the federal nature of the PPSR, and it supplements the primary Act by detailing the types of data that may be included in search results beyond what is mandated by the Act itself. The inclusion of certain data, such as information from the National Exchange of Vehicle and Driver Information System, is conditional and subject to the specific context of the search, such as searches involving motor vehicles. This determination does not exhaustively list all possible data inclusions but rather provides a guideline for the scope of information that may be included in search results, enhancing the utility of the PPSR for prospective users by ensuring that search results are as informative and accurate as possible.
Key Provisions
The Personal Property Securities (Search Result Data) Determination 2011 (Determination) sets out the specific data that may be included in a search result conducted on the Personal Property Securities Register (PPSR), in accordance with section 174(7) of the Personal Property Securities Act 2009 (the Act). This data includes information about the secured party, the grantor, and the personal property. The data is outlined in a table within section 4 of the Determination. For example, if a motor vehicle search is conducted, data from the National Exchange of Vehicle and Driver Information System (NEVDIS) may be included in the search result (section 4(1)(a)). Similarly, if an attachment file has been included in the Register as part of a registration, data relating to that attachment file may also be included in a search result (section 4(1)(b)). Additionally, data about an individual grantor may be included in the search result, depending on the type of collateral involved (section 4(1)(c)). For instance, if the collateral is consumer property, a statement that the grantor exists will be returned, but no other information will be provided. Conversely, if the collateral is commercial property, the name of the grantor will be returned, but not the grantor’s date of birth.
The Determination imposes specific obligations on the parties or entities it governs. For example, under section 4(1)(a), if a motor vehicle search is conducted, the PPSR must request data from NEVDIS for a serial number and retrieve the relevant vehicle information if available. Furthermore, under section 4(1)(b), if an attachment file has been included in the Register as part of a registration, the data relating to that attachment file must be included in the search result. Additionally, under section 4(1)(c), the data to be included in respect of individual grantors is dependent on the type of collateral involved. For instance, if the collateral is consumer property, only a statement that the grantor exists will be returned. Conversely, if the collateral is commercial property, the name of the grantor will be returned, but not the grantor’s date of birth.
The Determination also sets out specific offences, penalties, or civil/criminal consequences for breach. However, the Determination does not specify any maximum penalties for breach. Instead, it refers to the provisions of the Act, which may impose penalties for breach. For example, under section 190 of the Act, a person who knowingly or recklessly makes a false statement in a financing statement may be liable to a penalty of up to $55,000. Similarly, under section 191 of the Act, a person who knowingly or recklessly makes a false statement in a financing change statement may be liable to a penalty of up to $55,000. Furthermore, under section 192 of the Act, a person who knowingly or recklessly makes a false statement in a financing statement or a financing change statement with the intention of deceiving another person may be liable to a penalty of up to $220,000 or imprisonment for up to five years, or both. These penalties may be imposed in addition to any other civil or criminal consequences for breach.