A regulatory overhaul described as the most significant change to Australia's AML/CTF regime in almost two decades is pulling tens of thousands of new businesses into AUSTRAC's net — and the broking industry isn't yet sure whether it's one of them.
Norton Rose Fulbright estimates the reforms will bring 80,000 to 90,000 new reporting entities under the anti-money laundering and counter-terrorism financing (AML/CTF) regime, spanning lawyers, accountants, real estate professionals, and dealers in precious stones and metals.
For brokers specifically, the question is narrower: does commercial asset finance broking count as one of the newly captured services? The Finance Brokers Association of Australia (FBAA) says it isn't sure, and it wants AUSTRAC to say so directly.
FBAA regulatory compliance specialist David Carson (pictured left) said the association sought information from AUSTRAC ahead of the 1 July changes, after concluding that AUSTRAC's guidance could classify commercial asset finance broking as a "designated service" under the AML/CTF regime.
"We are not convinced it was ever the legislative intent to capture this activity so we remain hopeful that we can obtain clarification that it is not captured," Carson said.
FBAA CEO Leo Gagic (pictured right) has requested an urgent meeting with AUSTRAC to work through the practical implications for brokers and intermediaries.
"Our industry is keen to understand its compliance responsibilities and ensure we are appropriately preparing for any regulatory changes," Gagic said.
He said AUSTRAC now needs to confirm whether the broking channel is in scope, and, if so, the extent of the obligations that would follow. Gagic noted the FBAA has approached the regulator more than once, and that other industry associations have done the same.
Gagic said the FBAA supports Australia's AML/CTF framework and wants to work with AUSTRAC rather than against it.
"It is important for our industry to uphold best practices, for the sake of brokers and our customers," he said.
Gagic expects to clarify the situation soon and will update members once AUSTRAC responds.
That timeline gives brokers some breathing room. AUSTRAC has confirmed newly regulated entities have until 29 July to enrol and has said it does not expect "perfection immediately" from businesses working through the changes.
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