The PPSA rules that govern whether the PPSA applies to a particular security interest that has a foreign element will become more simple, and apply more often.

The PPSA will apply to a security interest if either the grantor is an Australian resident or entity (an Australian- incorporated company, or a registrable Australian body), or there is a connection between Australia and the collateral (for example, the collateral is located in Australia)¹.

This will mean that secured parties may have to maintain double-registrations where, for example, an Australian company owns property overseas, and grants a security interest over that property. The security interest may be registrable in Australia under the PPSA because the grantor is an Australian entity. It will also be highly advisable to register or otherwise perfect the (or take a another) security interest in the jurisdiction in which the collateral is located to facilitate enforcement if required.

In the opposite situation, where a foreign company owns property located in Australia and grants a security interest over it, again, the security interest may be registrable in Australia under the PPSA because the collateral is located in Australia. Whether the security interest is registrable in the country in which the foreign company is incorporated is a question for that foreign law. It would be common for the security interest to be registrable in the country of incorporation of the grantor. In any event, it is always highly desirable to hold a security interest granted in the jurisdiction of incorporation of the grantor entity, because any insolvency proceedings relating to the grantor are likely to be opened in the jurisdiction of incorporation.

Double registrations (taking security in both the jurisdiction of the grantor and the jurisdiction where collateral is located) were always highly desirable in cross- border security structures. Double registrations look like they will be increasingly common under the PPSA.