Purchase money security interests (PMSIs) are perfected by special rules, called the PMSI Rules in this book.

The PMSI Rules¹, which apply to all PMSIs including strong PMSIs (conditional sales by way of retention of title, commercial consignments and PPS Leases) and normal PMSIs², are that:

(a) perfection must be by registration;

(b) the registration must nominate that the security interest is a PMSI;

(c) where the collateral is inventory the PMSI must be registered before the collateral is either supplied to the grantor (for inventory that is goods), or the security interest attaches (for other inventory); and

(d) where the collateral is equipment (not inventory), the PMSI must be registered within 15 business days of supplying goods, or 15 business days of the security interest attaching for collateral other than goods.

Registration before attachment is likely to become the norm under the PPSA. The benefits of securing a priority time ahead of others before lending money or extending credit are enormous. The pre-PPSA practice of first taking a security interest and only then registering it, will be turned on its head.