On 2 July 2009, the Council of Australian Governments (COAG) agreed that PPS Reform should be implemented in May 2011. The legislation supporting the reform is already in place (Personal Property Securities Act 2009) and that the IT framework should be in place by May 2010.  These measures mean that businesses and consumers will have twelve months to prepare for the Reform. The reform is designed to meet a range of objectives.

1.             The aim is to establish a national framework for the regulation and registration of security interests in personal property.  This national framework would benefit businesses, individuals and consumers by delivering more certain, consistent, less complex and cheaper arrangements for the financing of personal property.

2.             At the centre of this framework would be the establishment of a single national law governing security interests in personal property.  This will replace more than 70 pieces of Commonwealth, State and Territory legislation that currently govern personal property securities in Australia. 

3.             There will be a single national online register of personal property securities (“the PPS Register”).  The new registration system would help prospective purchasers and lenders to determine whether personal property may be subject to a security interest or other kinds of interest prescribed in the regulations, and would facilitate the resolution of priority disputes.  The PPS Register would replace the more than 40 existing registers currently administered by Commonwealth, State and Territory agencies. Having one universal register will reduce costs as lenders will have to pay only one access fee for the information required, and may be able to reduce staff costs as the search and verification process will be less time consuming under the reforms.

4.             One key feature of the reforms is that it takes a functional approach to the characterisation of personal property securities.  The reforms would apply to any security interest in personal property that secures payment or the performance of an obligation regardless of the form of the transaction, the legal personality of the grantor, or the jurisdiction in which the property or parties are located or in which the transaction occurred.  This approach contrasts with and would be a significant improvement on the current formal approach to securities in personal property, where the form of the transaction largely determines the nature of the interest held.

5.             The proposed reforms should encourage lenders to grant loans on the basis of a security interest in personal property, at present the scales are tipped in favour of real property.