Proposed Fee Changes

On the 11^th April the Australian Financial Security Authority (AFSA), which operates the PPSR, issued a consultation document regarding changes to the PPSR’s fees intended to take effect from 1^st July 2018.

With the PPSR having, effectively, earned back its own development costs in its first 3 years of operation, its fees are now, pretty much, only there to ensure it covers its own running costs.  Given a steady growth in registration activity, AFSA believes that it can reduce its fees and yet still cover its own costs for the next few years and has thus proposed the following reductions:

Activity	Current	Proposed
7 year registration	$6.80	$6.00
7 to 25 year registration	$34.00	$25.00
Indefinite registration	$119.00	$115.00
Searches	$3.40	$2.00

The consultation document is silent on the matter of fees for ‘Minor Amendments’ and the reissue of Verification Statements.

Minor amendments include changes to:

• Free text description (collateral description)
• Subordination Indicator
• Giving of notice identifier
• Proceeds Indicator and description
• Vehicle Registration Number (i.e. the number plate of the vehicle)
• Aircraft Nationality
• Aircraft nationality code and registration marks assigned pursuant to the Chicago Convention (where not used as a serial number)

Minor amendments and the reissue of Verification Statements are currently charged at $3.40 each.  I’ve written to AFSA querying these omissions.

The consultation document can be found at https://www.ppsr.gov.au/cost-recovery-implementation-statement with any comments required to be forwarded to stakeholders@afsa.gov.au by 6pm on Friday 4^th May.

UPDATE: AFSA has now advised that 'Minor Amendments' such as changing Collateral Descriptions will (should the proposed new charges be accepted) no longer attract a charge from the PPSR.  Similarly, if the proposed new fees are accepted, the reissue of Verification Statements will also not attract a fee.

UPDATE #2: AFSA has issued a notice advising that the planned implementation of the fee reductions will need to be delayed in order to give certain stakeholder groups longer to prepare for the fee reduction.  I don't pretend to understand why it would need to take more than 2 months to prepare for a small fee reduction but, nevertheless, there will be a delay.  No fresh implementation date has been given at this point but I will update again when this is announced.


UPDATE #3: We've now had confirmation that the new fees will be implemented on 1st August 2018 following approval from the Attorney-General.

How to Conduct a Search of the PPSR

There are a few reasons why trade credit suppliers may need to search the PPSR not least of which is to find out who has been lodging registrations against them! 

But while trade suppliers may not have such an immediate need to search the register as, say, financiers, it is still helpful to have a good idea as to how a search is conducted if for no other reason than that knowledge will help ensure the accuracy of their own registrations. 

It is a good rule of thumb that if a registration won’t show up on a properly conducted search, it is almost certainly not going to be effective.

The first step is to visit https://www.ppsr.gov.au whereupon you’ll be presented with a great deal of help and guidance and, at the top right hand corner, a button to click in order to take you to the PPSR itself:

If you think you might need to consult the Register on a regular basis you might find it convenient to bookmark the landing page at https://transact.ppsr.gov.au/ppsr/Home?li=False&si=0.

Once on the PPSR there will be a couple of ways to start your search, but, for ease and consistency, I’m going to focus on options presented from the main menu tabs at the top of the page:

We’re obviously going to be concentrating on the PPSR’s search facilities and, hovering over the PPSR Search tab will provide the following options:

As you can probably tell from where I have my mouse cursor in the above screencap, we’re going to start off by conducting a search of a grantor which is classified by the PPSA as an organisation.  As is suggested by the only other grantor search option, the PPSA regards any entity that is not an individual as being an organisation.

Because it is relatively topical (see here) we’re going to conduct a search on ONESTEEL MANUFACTURING PTY LTD.

Firstly, we need to identify the grantor in accordance with the PPSR’s requirements.  To this end we are immediately asked if the organisation in question has an “ARSN”.

An ARSN is an Australian Registered Scheme Number and is primarily used by managed investment schemes – not a customary Grantor for trade credit suppliers.

After selecting ‘No’, you are then presented with:

OneSteel Manufacturing is a PTY LTD company and will therefore have an ACN (Australian Company Number).

However, once ‘Yes’ is selected and the opportunity to enter the ACN number is provided the following warning is also presented:

Here is the most clear-cut guidance provided by the PPSR that, where the company you are trading with is acting as the trustee of a trust, the registration needs to be lodged against the ABN of the trust. 

If OneSteel was acting as a trustee, we’d change our mind and, counter-intuitively, select ‘No’ to the question asking if they have an ACN, thus opening up the opportunity to select ‘Trust’ as an organisation type and enter the relevant trust ABN.  However, OneSteel does not act as a trustee of any trust, therefore, we will leave our response as ‘Yes’ and continue.

After entering OneSteel’s ACN in the box provided we are prompted to use the ‘Verify’ button to check to see that the number we’ve entered produces a name match with ASIC’s records that reflects our expectations.

In this instance, there’s been no error and all is good.

The PPSR now gives us the opportunity to tweak our search a little, offering the opportunity to search for registrations lodged during a specific date range:

Or for registrations lodged against specific classes of collateral:

Note, that if you choose to search by date range (say for example, you’re repeating a search conducted a couple of months ago and are only interested in registrations lodged since that time) you won’t be allowed any other options to filter your search.

Also note that if you choose to restrict your search to a specific collateral class (or classes) you will always have ‘All present and after acquired property’ registrations included in your results whether you wanted them included or not.

You also have some further options for your search under the heading Advanced search criteria:

The options are largely self-explanatory and, as you can see from the above screencap, are defaulted so as not to limit the search results.

I find it a little amusing that if you attempt to un-check all three Transitional registration criteria boxes you get the following error message:

Anyway, silly personal amusements aside, you then have the opportunity to sort your search results by registration number, either showing oldest to most recent or youngest to least recent.

And that is pretty much it. 

You get the opportunity to enter a reference to help remind you why you did the search or to identify later what the search related to, but the next step is to select ‘Search’ and get your credit card out ready to pay the $3.40 search fee.

UPDATE: Note that the fee for such searches has been reduced to $2.00.

Forthcoming PPSR Fee Changes

Just to give you the heads up on a forthcoming change to the PPSR’s registration fees.

The scheduled change is still subject to sign off by the Government but, given that the formal Cost Recovery Impact Statement (CRIS) produced by AFSA has been made publicly available, I’d suggest that sign off will be little more than a rubber stamping of the CRIS proposals.

From 1/07/2015 the following fee changes are proposed:

Activity	Proposed Fee	Current Fee
Registration up to 7 years	$6.80	$8.00
Registration 7 to 25 years	$34.00	$40.00
Registration – Indefinite	$119.00	$140.00
Minor Amendment	$3.40	$4.00
Search	$3.40	$4.00
Discharge	$0.00	$0.00

For major amendments the fee will continue to reflect the equivalent new registration charge for the duration of the registration.

Why the proposed reduction?

So far, the fees charged by the PPSR have included a component to finance a repayment of the Government's start up investment in the Register.  This repayment is scheduled to be completed by 30th June 2015 thus charging beyond that date may be reduced proportionately - this amounts to a 15% reduction across the board.

As I have previously written on the importance of timely registration, it would be foolish to consider waiting until the new charges are introduced before lodging registrations!

Planned Increases to PPSR Charges

The Insolvency and Trustee Service Australia (ITSA) - the organisation that operates the PPSR - has recently issued a Cost Recovery Impact Statement (CRIS).  

While the purpose of the CRIS is to demonstrate how ITSA recovers its PPSR related costs it also includes a proposal for increases to its fee structure for those registering and searching on the Register.

ITSA has undertaken a review of its PPSR operations in the first 12 months, including a comparison of estimated transactions volumes and revenue. Revenue in the current financial year is tracking approximately 4% below the initial forecast, due to the mix of transactions being more weighted to the lower end of the spectrum than expected. 

The proposed fee structure reflects price increases across each category. Search fees are proposed to increase by $0.30 per transaction and registrations ranging from $0.60 (for the highest volume category) to $10.00.  

Thus:

Duration	Current Charge	Proposed Charge
Up to 7 years	$7.40	$8.00
7 to 25 years	$37.00	$40.00
No stated end date	$130.00	$140.00
Minor amendments	$3.70	$4.00
Other amendments	As per registration charges
Searching the Register	$3.70	$4.00

Due to very low demand and the availability of alternative options, the ITSA National Service Centre will no longer be offering services for registrations and amending finance statements.  Apparently, out of a total of 1,466,308 registrations in the first year of operations, only 21 were lodged through the National Service Centre.

The new charges are scheduled to be introduced for the 2013/14 financial year.