Chapter 21
The Extinguishment Rules
- 21.1 The Extinguishment Rules – Introduction
- 21.2 Table Summarising the Extinguishment Rules by Class of Collateral
- 21.3 The Extinguishment Rules - Commentary
- 21.4 Buyer or lessee of personal property subject to unperfected security interests – section 43
- 21.5 Sales or leases of serial-numbered property – motor vehicles, watercraft, aircraft/engines and intellectual property (patents, trade marks, designs and plant breeder’s rights) – section 44
- 21.6 Private sales or leases of motor vehicles – sections 45(1) - (2)
- 21.7 Buying motor vehicles from licensed dealers – sections 45(3) - (4)
- 21.8 Buying or leasing from a seller/lessor in the ordinary course of business – section 46
- 21.9 Low value (below $5,000) consumer property (except serial numbered property) – section 47
- 21.10 Currency – section 48
- 21.11 Prescribed financial markets – investment instruments and intermediated securities – section 49
- 21.12 Investment instruments – section 50
- 21.13 Intermediated securities – section 51
- 21.14 Temporarily perfected security interests – section 52
- 21.15 Returned goods following sale or lease
- 21.16 Subrogation by extinguished secured parties to rights in relation to collateral sold or leased
21.11 Prescribed financial markets – investment instruments and intermediated securities – section 49
Buyers of investment instruments or intermediated securities in the ordinary course of trading on a prescribed financial market (for example, the ASX) take free of a security interest1
Security interests over listed instruments or securities need to be appropriately controlled by a secured party to ensure they are not extinguished when the instruments or securities are sold. In fact, control should ensure the instruments or securities are not sold (at all) without the consent of the secured party.
See paragraphs 17.6.21 to 17.6.29 of Chapter 17 (Perfection) for how to perfect a security interest by control over investment instruments and intermediated securities.
Notes:
1 PPSA section 49 (link)
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