There is little change to the consequences of finding that a security interest is a circulating security interest under the PPSA. Circulating security interests are subordinated under the Corporations Act 2001 (Cth) just as floating charges are subordinated.

Circulating security interests are subordinated to the following claimants in respect of circulating assets where the grantor owns title to the assets (this would exclude, for example, leased assets – see Corporations Act section 51C):

One potentially important difference in the priority position of a circulating security interest as opposed to a floating charge is that, from above, circulating security interests attach to after-acquired property without appropriation under the PPSA, whereas floating charges (on the better view) do not. This means that, while circulating security interests are still subordinated to certain claimants as outlined above, they will potentially be stronger against other security interests in the same collateral if perfected first. This is likely to be relevant mainly in relation to disposals of collateral outside the trading power (ordinary course of business) – collateral disposed within the scope of the trading power permitted by the secured party to the grantor is lost.