Title transfer collateral arrangements under the Personal Property Securities Act 2009 (Cth): paper II arrangements as security interests

Abstract

After exploring how title transfer collateral arrangements operate in the financial markets, Paper II argues that repos and securities lending arrangements functioning in a manner equivalent to traditional secured loans are likely to fall within the definition of a PPSA security interest, seemingly contrary to market expectations. The argument is developed as a matter of statutory construction, based on the Australian legislative text. The paper analyses the slight body of relevant overseas jurisprudence, drawing support from New Zealand cases on some analogous points but distinguishing conclusions reached in the United States. It directly confronts concerns expressed in the United States regarding the impact of the seller (under a repo) and the lender (under a securities lending arrangement) purporting to transfer the whole of their property interest, focusing on important differences in legislative drafting. The paper also raises in this context the possibility of intervention by Equity to address such concerns.