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Personal Property Securities Register commences 30 January 2012

posted Mar 22, 2012, 9:39 PM by Austin Carwardine
The Australian government's commencement of operation of the Personal Property Securities Register on 30 January 2012 has caught many carriers and CSPs unaware, with many telcos not fully understanding the implications for their business.

The PPSR has created implications for those telcos who sell or otherwise provide equipment to customers.  If equipment is sold under a contract and the seller wishes to secure its interest by means of a retention of title clause in that contract, the seller now has to register its interest in order to secure its claim against the purchaser's secured creditors should the purchaser become insolvent before paying for the equipment.  Other circumstances in which equipment is at risk due to non-registration include equipment lease agreements and service agreements where CPE (such as transmission equipment and termination units) are provided to customers on a long term basis.

Even typical 24 month mobile handset plans, where the mobile carrier retains title to the handset until the completion of the term, are affected.  In this case, however, the cost of registration will need to be weighed against the advantage gained from securing the carrier's interest.  Nevertheless carriers and CSPs need to closely examine their contracts and business practices, and assess whether they should be registering their interests on the PPSR.