Australia’s Tranche 2 AML/CTF Reforms: What you need to know before 1 July 2026
Australia is implementing long-awaited reforms to bring certain professional services into the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). These are known as the “Tranche 2 reforms.”
From 1 July 2026, specific professions will be regulated because their services have been assessed as higher-risk for money laundering and terrorism financing. The goal is to bring Australia in line with global FATF standards.
Who will be captured under the Tranche 2 AML/CTF Reforms?
You may be captured if you operate in any of the following sectors and provide a designated service:
- real estate professionals – such as real estate agents, buyer's agents and property developers
- conveyancers
- dealers in precious metals, stones and products
- lawyers
- accountants
- trust and company service providers.
Whether your business is subject to the AML/CTF obligations depends on the services you provide. These are known as designated services.
If your business provides one or more designated services that have a geographical link to Australia, you have AML/CTF obligations.
In simple terms: you are captured by the AML/CTF Act, if your business assists clients with one or more of the following activities.
These are called “designated services” under Table 6 of the AML/CTF Act. If you provide any of these services in the course of your business, the new AML/CTF obligations will apply to you from 1 July 2026.
These designated services are set out in listed under table 6 of subsection 6(5B) to the AML/CTF Act.
Table 6 apply across multiple professional sectors including law, accounting, real estate, conveyancing, trust and company services, and dealers in precious metals/stones (AUSTRAC).
Designated Services – Plain English Summary
You are likely captured if you assist a client with:
1. Buying, selling or transferring real estate
Examples:
- preparing or lodging sale contracts
- completing conveyancing for residential or commercial property
- advising and acting in settlement steps
2. Buying, selling or transferring a company, trust or other legal structure
Examples:
- drafting or negotiating share sale agreements
- acting on business acquisitions or disposals
- transferring units in a unit trust
3. Receiving, holding, controlling or managing client money or assets as part of a transaction
Examples:
- holding purchase funds in trust
- disbursing settlement proceeds
- managing client assets linked to a transaction
(Important: funds held solely for professional fees or disbursements are generally excluded.)
4. Equity or debt financing transactions
Examples:
- arranging or documenting capital raisings
- private equity or venture funding support
- preparing or advising on loan or financing agreements
5. Selling or transferring a shelf company
Examples:
- providing and transferring “off-the-shelf” companies to clients
6. Creating or restructuring companies, trusts, partnerships or other legal arrangements
Examples:
- drafting constitutions, trust deeds or partnership agreements
- preparing shareholder agreements
- conducting corporate restructures, mergers or demergers
7. Acting as (or arranging for someone to act as) a director, secretary, trustee, partner, attorney, or similar position
Examples:
- nominee director or secretary
- nominee trustee or partner
- acting under a power of attorney for an entity
8. Acting as a nominee shareholder
Holding shares for a client and acting on their instructions.
9. Providing a registered office or principal place of business for a client
Examples:
- allowing a client to use your office as their ASIC-registered address
- providing a principal place of business for a trust, company or legal arrangement
If your law firm, accounting practice, real estate business, or professional services firm assists clients with any of the above—even infrequently—you are very likely captured and must comply with the new AML/CTF obligations from 1 July 2026.
Practical examples: when you are “in” and when you are not
Real estate and conveyancing
- Captured: You act for a client to purchase a commercial property, draft and negotiate the contract, hold the deposit in trust and attend settlement.
- Not captured: You provide one-off advice to a client on the meaning of a contract clause, but do not act on the transaction.
Corporate and commercial
- Captured: You act for a client selling all shares in a proprietary company, prepare the share sale agreement, coordinate due diligence, and lodge ASIC forms to transfer control.
- Not captured: You provide general tax advice on the potential sale but are not engaged to implement it.
Accountants
- Captured: An accounting firm is engaged to act on the sale of a client’s company, including negotiating the deal and preparing completion accounts as part of the transaction.
- Not captured: An accountant gives high-level tax scenario modelling without any actual sale process underway.
Trust and company service providers
- Captured: Your business sells shelf companies, provides registered office services and offers nominee directors to offshore clients.
- Captured: You form discretionary trusts for clients and act as trustee or corporate trustee.
Dealers in precious metals and stones
Dealers are captured where they fit the new AML/CTF definitions and provide high-value transaction services that move or store value on behalf of clients.
Check if you may be regulated
The impact of being regulated and what will captured businesses need to do?
If your activities fall within the designated services, you will need to:
1. Enrol your business with AUSTRAC
Provide details about your structure, key personnel and services, and keep this information current.
2. Develop and maintain a tailored AML/CTF program
This is the core document that explains:
- your ML/TF risk assessment
- your policies and procedures for managing those risks
- how you identify and verify clients
- how you use and supervise staff, agents and town agents
- how you monitor, escalate and record issues
The program must match the size and nature of your business and actually operate in practice.
3. Conduct customer due diligence (Know Your Customer)
Before providing a designated service you will usually need to:
- identify the client and, where relevant, beneficial owners
- verify their identity using reliable sources
- understand the purpose of the matter and expected transaction behaviour
- apply enhanced checks for higher-risk clients, countries or sectors
4. Appoint an AML/CTF Compliance Officer and train staff
You will need:
- a designated AML/CTF Compliance Officer
- regular training for partners, fee-earners, support staff and relevant agents
5. Report to AUSTRAC
Captured entities will be required to submit:
- Suspicious Matter Reports (SMRs) where something looks unusual, inconsistent or potentially linked to ML/TF
- other reports where relevant under the AML/CTF Act
6. Keep records
Most AML/CTF records, such as customer identification, risk assessments and transaction information, must be kept for seven years.
Key dates and Tranche 2 timeline
AUSTRAC has set out a staged roadmap for Tranche 2.
Based on publicly available AUSTRAC guidance, the key milestones are expected to include:
- August 2025: New AML/CTF Rules for Tranche 2 published.
- October 2025: Core guidance released, followed by an ongoing education roll-out.
- End of January 2026: Sector-specific guidance for different professional groups released.
- 31 March 2026
- Enrolment opens for newly regulated Tranche 2 entities.
- Updated AML/CTF obligations begin for current reporting entities and newly regulated virtual asset service providers.
- 1 July 2026
AML/CTF obligations commence for Tranche 2 entities, including relevant professional services.
From 1 July 2026, you must already be enrolled and operating under a compliant AML/CTF program if you provide designated services.
What should you do now?
If you are in one of the affected sectors, you should:
- Map your services against the Table 6 designated services.
- Decide whether you will continue to offer higher-risk services once Tranche 2 starts.
- Start building your risk assessment and AML/CTF program.
- Monitor AUSTRAC’s Tranche 2 guidance and sector-specific materials.
- Plan for training, systems changes and client-onboarding updates ahead of 31 March 2026.
You can also use AUSTRAC’s online “Check if you may be regulated” tool and professional-services guidance pages for more detail and examples.
How Click Legal can help
Click Legal advises professional services businesses on AML/CTF, Tranche 2 reforms and financial-crime compliance.
We can assist you to:
- identify whether the services you provide are designated services
- perform and document an ML/TF risk assessment
- design a fit-for-purpose AML/CTF program
- create client-onboarding, KYC and escalation procedures that work in practice
- prepare training materials for partners, staff and agents
- develop an implementation roadmap through to 1 July 2026
For tailored legal advice on how the AML/CTF reforms apply to your business, contact:
Contact Click Legal for tailored AML/CTF guidance
E: hello@clicklegal.com.au
P: 0450 502 672
Disclaimer:
This blog provides general information based on Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms and publicly available AUSTRAC guidance. It does not take into account the specific circumstances of your business. AML/CTF obligations can vary depending on the services you provide and your individual risk profile. Click Legal provides specialist AML/CTF legal and compliance advisory services. If you require advice on how the reforms apply to your business, its services, or your AML/CTF obligations, please contact us for specific guidance tailored to your circumstances.