The Financial Advice Association Australia (FAAA) is seeking further clarification from the Department of Home Affairs on some issues relating to the Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) Act tranche two reforms.
“Our goals are quite simple and that’s to retain the item 54 exemptions that financial advisers currently operate under and that we’re not caught unnecessarily by these new tranche two services,” FAAA chief executive Sarah Abood told attendees of a member advocacy webinar held yesterday.
“But there’s a registration deadline, literally at the end of this month, and then a compliance deadline at the end of June. We have asked for more time if we’re not able to get that clarification. We’re continuing to advocate for it.”
The reforms capture new organisations that will be required to enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) by 1 July for most new entities. They will then be required to conduct initial and ongoing customer due diligence and report certain transactions and suspicious activity.
One of the issues the FAAA has identified that requires addressing is the relevant entity from which to report to AUSTRAC in the case of a multi-discipline firm.
“If you’re in, say, a multi-discipline firm with advice and accounting, then there’s another reporting entity there, perhaps for the accounting firm, and it’s less clear how that affects us, so that’s something we’re looking at,” Abood explained.
The industry body is also asking the Department of Home Affairs for some specific definitions around tranche two services, especially as they relate to managed accounts. To this end, Abood noted, as the legislation stands, even if you are just using a managed account and are not the operator of it, some of the current wording could suggest the circumstances may be captured as a tranche two service.
“We don’t think that that is the intent, but we do want to get clarity that that’s not the case so that people are not having to register as a provider of tranche two services,” Abood said.
Given the high administrative burdens on financial advisers as it is, the FAAA is working on making sure practitioners are not unintentionally caught up in requirements that may not relate to them.
