Broker association wants urgent guidance on whether commercial asset finance broking falls under reforms
The Finance Brokers Association of Australia (FBAA) has requested an urgent meeting with the Australian Transaction Reports and Analysis Centre (AUSTRAC) to clarify whether brokers and intermediaries are captured by sweeping anti-money laundering and counter-terrorism financing (AML/CTF) reforms that took effect on July 1, 2026.
The reforms – the most significant overhaul of Australia's AML/CTF regime in almost two decades – extended the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to a raft of so-called "tranche two" entities, including lawyers, accountants, real estate professionals, and dealers in precious stones and metals.
FBAA chief executive Leo Gagic (pictured) said brokers should not rush into making major compliance changes at this stage, but confirmed there is genuine uncertainty over whether the broking channel is captured by the new obligations.
What the AML/CTF changes involve
The AML/CTF Amendment Act, passed by parliament in November 2024, reframed the definition of a "designated service" and folded a wider set of professions into AUSTRAC's regulatory net. According to AUSTRAC's own guidance for newly regulated businesses, tranche two entities became subject to enrolment, program, and reporting obligations from July 1, 2026, having been able to register with the regulator from March 31, 2026.
Law firm analysis published ahead of the deadline put the scale of the change in context. Norton Rose Fulbright estimated that the reforms would bring an estimated 80,000 to 90,000 new reporting entities into the AML/CTF regime, spanning lawyers, accountants, real estate agents, and other professions not previously regulated under the Act.
Newly regulated businesses must appoint an AML/CTF compliance officer, enrol with AUSTRAC, and implement a two-part written program covering risk assessment and customer due diligence.
Where the ambiguity for brokers arises is in how AUSTRAC has drafted its guidance on real estate-related designated services. AUSTRAC's own reform materials state that brokering, planning or executing the sale, purchase or transfer of real estate can constitute a designated service, extending to activities such as preparing contracts or holding funds in trust – even where a transaction does not proceed.
But the FBAA argues that language of this kind creates a plausible reading under which commercial asset finance broking, a mainstay activity for many of its members, could be swept into scope, despite that appearing inconsistent with the original policy intent of the reforms.
Why brokers are concerned
FBAA regulatory compliance specialist David Carson said the association sought information from AUSTRAC before the July 1 changes took effect "because the way their guidance has been drafted would appear that commercial asset finance broking could be defined as a designated service which would bring it under AML/CTF rules”.
"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," he said.
Gagic said the uncertainty has spread well beyond a technical reading of the legislation. "Our industry is keen to understand its compliance responsibilities and ensure we are appropriately preparing for any regulatory changes," he said, adding that AUSTRAC needed to allay "significant uncertainty and confusion across the broker community regarding whether these changes apply to our sector, and if so, explain the extent of the obligations that may arise”.
Gagic confirmed the FBAA has approached the regulator more than once. "We have contacted AUSTRAC again to seek definitive guidance on these matters, and we note that other industry associations have done so as well."
Gagic stressed that the association's position is constructive rather than adversarial, highlighting the FBAA's support for the broader integrity of the AML/CTF framework. "It is important for our industry to uphold best practices, for the sake of brokers and our customers," he said, adding that the association is "committed to supporting Australia's AML/CTF framework and wants to work collaboratively with AUSTRAC."
