The new personal property security registry (PPS Registry) went live on May 9, 2016.
The Personal Property Security Act 2011 (PPS Act) was gazetted and came into operation on May 4, 2016 and the regulations made under that act (Regulations) came into operation on May 5, 2016.
The PPS registry is fully electronic, and will receive notices of security interests and the interests of execution creditors (such as judgment holders, bankruptcy trustees and liquidators).
Security holders or their agents will submit their own filings online, which will then be fed directly to the database, meaning the registrar does not review the notices for accuracy or completeness.
This article details how the PPS registry will operate in practice and then goes on to deal with various issues concerning securities created prior to the commencement of the PPS Act in 2016.
Creating An Online Account
All users of the PPS registry must be registered as clients of the Registry in order to make filings or obtain certified search results. The registration process involves providing biographical information sufficient to identify the party dealing with the Registry. Once registered, the account must be funded either via a credit card or other payment option. There is no fee to register as a client of the PPS registry.
Many law firms and accounting firms operating in PNG will be registering as clients of the PPS registry, with the result that a security holder may register its securities either directly or by using an online account created by their lawyers or accountants.
Pre-Exisiting Security Interests
Prior registered securities, also known as pre-existing transactions, may be re-registered in the Registry. This is the responsibility of the secured party (or its agent) and will not happen automatically.
An automatic migration of pre-existing securities was originally proposed; however, the final form of the legislation does not provide for this service.
OBG would like to thank Leahy Lewin Lowing Sullivan THE REPORT Papua New Guinea 2016 The PPS Act provides for a transition period of 180 days within which to register all pre-existing securities. Any pre-existing securities filed within the period of 180 days from the date of commencement of operation of the Act (that is, by November 4, 2016) will not attract a filing fee.
After the 180-day grace period expires, however, a filing fee of PGK10 ($3.41) per security interest will be charged for registration of each pre-existing security.
It is important to note that while filing in respect of both new security interests and pre-existing security interests is voluntary, the consequences of not filing a security notice may be dire. The main consequence of not filing is that security interests that are registered take priority over other interests.
Note that there is no fee for a non-certified public search of the registry records.
All filings will be done electronically online and there is no paper filing.
All fees must be paid at the time a filing is submitted. The PPS Registry will not accept a filing unless the fee is paid at the same time. Payments will be submitted through client accounts. The client account can be funded in one of two ways: via credit card or by paying the filing fee to the Investment Promotion Authority (IPA). In the latter case, IPA will credit the client account with the amount deposited, which amount will then be automatically deducted as online filings are made.
Regular users are encouraged to credit a larger amount of funds into their client account and let the system automatically deduct the relevant filing fee amount every time a notice is being filed. Pre-funding the client account is more convenient and saves the hassle of making one-off payments to the IPA or having to enter credit card details for every transaction.
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