Commercial finance brokers have been given breathing room on new anti-money laundering obligations, after AUSTRAC confirmed it is reviewing how the reforms apply to the sector and that no compliance action is required in the meantime.
Brokers are not expected to take any steps towards compliance until AUSTRAC's position has been finalised and published. The confirmation follows joint advocacy by the Mortgage & Finance Association of Australia (MFAA) and the Commercial & Asset Finance Brokers Association of Australia (CAFBA), which raised concerns that the drafting of a new designated service, relating to organising equity or debt financing, could unintentionally capture traditional commercial finance broking activities. AUSTRAC has confirmed it is now reviewing the point.
MFAA CEO Anja Pannek (pictured left) said the uncertainty had left brokers unsure of their obligations under the reforms.
"When the legislation was introduced, it wasn't clear whether some traditional commercial finance broking activities were intended to be captured. That uncertainty made it difficult for brokers to know what they might need to do," Pannek said.
She said AUSTRAC's confirmation that no immediate action is required was a practical outcome for brokers.
"It means businesses can continue supporting their clients while AUSTRAC works through the detail," Pannek said.
Both associations argue that regulatory obligations should reflect the different role commercial finance brokers play. Pannek said the MFAA's advocacy was aimed at avoiding unnecessary costs for businesses never intended to be caught by the reforms.
"Good regulation should strengthen the system without making it harder for brokers to do what they do best: helping Australian businesses access finance," she said.
CAFBA, which advocated alongside the MFAA, echoed that view.
CEO David Bushby (pictured right) said the resolution reflected the benefit of close engagement with regulators.
"This provides reassurance for commercial finance brokers while AUSTRAC finalises its position,” Bushby said. “We remain committed to supporting a strong AML/CTF framework while ensuring the legislation operates as intended and does not create an unnecessary regulatory burden."
The MFAA has already published guidance for members outlining the update and says it will continue to provide information as AUSTRAC's review progresses. Pannek said the associations would keep pressing for practical outcomes as the policy position is finalised, with a focus on ensuring members have clear guidance and the confidence to keep supporting their clients throughout the process.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
