Company-formation firms, registered-office providers, nominee directors and shareholders, and trustee-service providers all become reporting entities under Tranche 2. The risk concentration here is the highest of any Tranche 2 sector, services explicitly designed to introduce opacity between the legal-entity layer and the natural persons behind it. This page covers what changes for each service type.
Trust and company service providers (TCSPs) sit at the heart of the obligations because the services themselves, forming entities, providing nominee roles, registered offices, are the operational mechanisms that ML/TF actors use to layer transactions. The Tranche 2 obligations therefore apply with full depth: customer due diligence on every client at engagement, full beneficial-ownership identification of every entity formed or administered, enhanced procedures on every higher-risk service (nominee roles, off-shore links, complex structures), and a Suspicious Matter Report process tightly integrated with the daily operational flow.
Enhanced customer due diligence on the client (cross-border + entity formation factors). Beneficial-ownership identification of the company being formed, including the proposed directors and shareholders. Senior-management sign-off on the engagement.
Designated service. Customer due diligence at engagement, ongoing monitoring of any correspondence pattern that suggests the entity is being used as a front, and refreshed beneficial-ownership identification on material changes.
Highest-risk designated service. Full identification of the beneficial owner (the person for whom the nominee role is held), documented rationale for the nominee structure, senior-partner sign-off, and enhanced ongoing monitoring.
Identification of the settlor, the trustee (if corporate, its beneficial owners), and the named beneficiaries. Ongoing monitoring of distributions and any changes to the beneficiary class.
Every TCSP must enrol as a reporting entity. The registered entity is the firm providing the services.
Part A + Part B with explicit procedures for each TCSP service type: formation, registered office, nominee, trustee. The risk assessment recognises the higher inherent risk of the sector.
Identification + verification of every client at the start of every designated service. Enhanced procedures apply where the client structure is complex, cross-border, or uses nominee arrangements.
For every entity formed or administered, identify and verify the natural persons who ultimately own or control. The 25% threshold is a starting point; the obligation extends to effective control regardless of percentage.
Nominee director, nominee shareholder, registered office for off-shore-owned entities, and any cross-border element trigger enhanced procedures: source of wealth + source of funds documentation, senior-management sign-off, tightened ongoing monitoring.
TCSPs see ML/TF indicators in the routine work, sudden changes in beneficial ownership, instructions inconsistent with the established business pattern, layered transaction requests. SMR within 3 business days of suspicion.
Annual compliance report to AUSTRAC, due 31 March covering the previous calendar year. Customer identification, transaction records, training records retained 7 years.
Captures customer due diligence at engagement, maintains the beneficial-ownership register continuously as entities change, flags higher-risk patterns across the client base, drafts the annual AUSTRAC compliance report from the audit trail, and supports the senior-management sign-off workflow for enhanced engagements. Runs inside your tenancy, beneficial-ownership records and client information stay on your infrastructure, not a third-party SaaS.
Every claim on this page draws on the AUSTRAC published guidance for Tranche 2 entities, plus the sector-specific commentary listed below.
Twenty-five questions, an inline readiness percentage, and a personalised PDF report mapped to tcsps obligations. Free, no commitment, no demo required.
This assessment provides general information about Tranche 2 obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). It is not legal advice. For your specific obligations, consult an AML/CTF compliance professional.