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AML/CTF Hub
Your hub for the latest updates and obligations relating to the AML/CTF regime.
What is the purpose of the AML/CTF regime?
The AML (Anti-Money Laundering) and CTF (Counter-Terrorism Financing) regime serves to prevent criminals and terrorists from abusing the financial system by identifying and stopping currency flows linked to serious crime and terrorism, making society, and your business safer. AUSTRAC are the regulator of the AML/CTF regime in Australia.
Obligations for financial advisers - Item 54 reporting entities
The provision of financial advice is considered an item 54 designated service under the AML/CTF Act. It is “making arrangements for clients to receive other designated services from other reporting entities”, such as product providers. As arranging for services from other providers is considered a low AML/CTF risk activity, item 54 reporting entities (AFSLs) are exempt from a few of the obligations in the AML/CTF Act.
Significant reforms – what are they?
There are significant changes to the AML/CTF regime that will impact all financial advisers and licensees over the next year.
- From March 2026, there will be new AUSTRAC rules and guidance affecting all existing reporting entities, including AFSLs
- From 1 July 2026, the new regime will apply to new tranche 2 designated services
To allow each business to meet their AML/CTF obligations in a way that best facilitates the risk assessment of their business, the reforms will make the requirements:
For more background visit:
AUSTRAC are currently consulting on:
Do you provide the new ‘tranche 2 designated services’?
The reforms introduce a new tranche of designated services that includes services typically provided by lawyers, accountants and real estate agents. These new definitions are based on the services provided, not the professional who provides them.
IMPORTANT: If the additional services you offer clients fall within the definition of another designated service, you will lose the item 54 exemptions and be required to meet the full set of obligations.
It will be a business decision for advisers and licensees to determine whether to provide item 54 services only and utilise the exemptions; or provide additional services to clients and comply with the full range of AML/CTF obligations, including governance and controls (ie. governing body and compliance officer), compliance and reporting, and ongoing Customer Due Diligence (CDD).
What should you do to prepare for the new ‘tranche 2 designated services’?
You may not meet your obligations in the new regime if you just do what product providers ask you to do. Your AML/CTF policies must match the ML/TF risk of your business.
- Incorporate the reforms into your business as a risk management tool, like cyber security risk or business interruption risk.
- Embed in BAU – make AML/CTF part of the culture and BAU activity of your business.
- Prepare early – take time now to assess whether the services you provide your clients are likely to be captured by the new tranche 2 designated services, and understand the additional governance arrangements you must put in place in your business and the changes to the CDD obligations.
- Speak to your licensee about the AML/CTF reforms.
- Stay informed by subscribing to AUSTRAC updates.
What are the current AML/CTF item 54 obligations?
All Financial Advice AFS Licensees must enrol as a reporting entity with AUSTRAC:
Under the item 54 exemptions, AFS licensees are currently required to adopt and implement throughout their business the following aspects of an AML/CTF program:
See also:
While the above is an old report if may help financial advisers and AFSLs understand and identify potential ML/TF risks in their business and when servicing clients.
IMPORTANT: Advisers should ensure they understand their licensee's AML/CTF policy
Industry standardised CDD forms
The Financial Services Council (FSC) and the FAAA previously developed a Guidance Note and 13 standardised customer identification forms (for various customer types) to help financial advisers and product issuers manage their AML/CTF customer identification obligations. Advisers are likely to be familiar with the FSC/FAAA Client Identification forms where they record how they have identified a client.
FAAA SafeID
In addition to supporting the FSC/FAAA client identification forms, the FAAA will be launching a digital client identification and verification tool called FAAA SafeID. We are working with product providers to accept this new form of identification to make the process easier and safer for advisers and clients. FAAA SafeID will be a fast, convenient, digital tool for identifying and verifying your clients while protecting their data.
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We are always keen to hear your valuable feedback and suggestions. Please let us know if there are any policy issues or concerns that affect you.
