The Personal Property Securities Register (PPSR) was introduced in early 2012 and replaced the Retention of Title (ROT) rules on goods supplied. The only way for suppliers to ensure stock is now protected is to register security interests on the national PPSR website.
According to the Jewellers Association of Australia’s (JAA), despite its efforts to create awareness about the PPSR, many businesses might still not be aware that their ROT clauses have been obsolete and unenforceable since the new legislation commenced.
“The JAA has informed the industry in emails and has published several articles on PPSR over the last two years, but yet very few jewellery industry suppliers have registered their security over unpaid goods, and goods on consignment. We need everyone to be aware of what is at risk,” the association’s CEO, Ian Hadassin, explained.
A webinar was recently conducted by JAA board member Colin Pocklington, who has more than ten years experience working with similar PPSR legislation in New Zealand and has implemented the system for the Nationwide Jewellers buying group in Australia.
“It was evident that some suppliers were under the misapprehension that they need to register each and every shipment. This is totally incorrect. Suppliers only need to register each customer, and then they are covered for all goods delivered subsequent to registration,” Pocklington said.
For some suppliers, the recent collapse of specialist retailer Status Accessories resulted in heavy losses for product provided to the stores on consignment, and was the first time they had become aware of the new legislation.
The deadline for the PPSR transition period is 31 January 2014; the transitional provisions were designed to assist with the changeover and provide protection for security interests that existed prior to the commencement of the PPSR.
From 31 January, suppliers that have failed to register their security interests may lose priority in the event of a customer’s insolvency.
As previously reported by Jeweller, the new legislation is said to have minimal impact on retailers and may even benefit small businesses by increasing available avenues of finance.
According to a Government statement: “The current arrangements for determining whether personal property is subject to a security interest restrict the ability of businesses to use their personal property as security for credit.”
The new legislation however, will require retailers to deduct the value of any unpaid goods from their stock, potentially decreasing asset value.