AUSTRAC Told the FBAA It Didn’t Mean to Capture Asset Finance Broking. Item 4 of Table 6 Still Lists Asset Financing — and the Position Isn’t Confirmed

On 9 November the FBAA told its members it had made progress on a question that has sat unresolved over the commercial side of the broking industry since July: whether arranging a business loan makes you a reporting entity under Australia’s anti-money laundering regime.

The association’s statement says AUSTRAC has indicated that ordinary commercial and asset finance broking is not generally meant to fall within the expanded AML/CTF obligations that commenced on 1 July 2026. On its face, that is the answer commercial brokers have been waiting four months for.

Read the statement closely, though, and two words do a lot of work. The FBAA describes the position as proposed, and says it will keep working with AUSTRAC “until the position is formally confirmed and brokers have the clarity they need”. As at the time of writing, AUSTRAC has published nothing on the question. The guidance that caused the problem is still on its website, unchanged.

So this is not a moment to file the issue as closed. It is a moment to understand exactly which of your files the relief would cover if it is confirmed — and which ones it would not touch at all.

What the provision actually says

The reforms inserted a new table 6 into section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, covering what AUSTRAC calls professional designated services. Obligations for those services commenced on 1 July 2026, bringing in real estate agencies, legal services, accounting, conveyancing, trust and company service providers, and dealers in precious stones and metals.

Finance broking was not on that list of sectors. The problem is that table 6 does not work by sector. It works by service. And item 4 of the table, as AUSTRAC’s own guidance sets it out, captures:

“assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to: (a) a body corporate (or proposed body corporate); or (b) a legal arrangement (or proposed legal arrangement); in the course of carrying on a business”

A broker who arranges a $180,000 equipment facility for a Pty Ltd client is assisting a person in organising a transaction for debt financing relating to a body corporate, in the course of carrying on a business. On the words alone, it is difficult to see how that sits outside the item.

AUSTRAC’s guidance on item 4 makes the reading harder to escape rather than easier. It states that the service “includes all capital and debt raising methods”, and the examples it gives of debt financing are loans — including government loans — secured or unsecured bonds, bills or notes, debentures, and asset financing. That last term is the one that turned a drafting question into an industry one.

How the question got here

The FBAA raised the issue with AUSTRAC in July, arguing the guidance defined debt financing so broadly that ordinary asset finance arrangements could be captured. According to reporting by Mortgage Professional Australia on 23 July, AUSTRAC acknowledged that item 4 of table 6 may be worded broadly enough to potentially capture commercial asset finance broking, and conceded that its guidance did not explain the intended scope of “debt financing”.

In a letter to the FBAA dated 21 July, as reported by Australian Broker, the regulator said businesses did not need to start working towards compliance on this question until it published its position, and acknowledged that affected businesses would need time to prepare if broking were found to be in scope.

Then it went quiet. By 20 October, three months on, the FBAA was still waiting. “We remain committed to pursuing this matter to resolution, so members have certainty about any obligations,” FBAA chief executive Leo Gagic said at the time. “We know members need a clear answer. We will continue pressing for one and share further advice as soon as it is received.”

The 9 November statement is the first movement since that July letter. “AUSTRAC has listened to our concerns and worked through the issue,” Gagic said. Under the position the FBAA describes, brokers arranging commercial or asset finance for everyday business needs — equipment purchases, working capital — would generally not need to enrol separately with AUSTRAC or stand up their own AML/CTF programs for that work. Brokers would continue supporting lenders in meeting the lenders’ own obligations, as they do now.

Why “proposed” matters while enforcement is already running

The reason the unconfirmed status is worth taking seriously is that the rest of the regime is not waiting.

Broker Daily reported on 5 October that AUSTRAC had begun issuing infringement notices to real estate, accounting and jewellery businesses that had failed to enrol, with penalties of up to $21,840 for companies and $4,368 for individuals, accruing daily while a business remains unregistered. The notices followed requests for information in August to businesses that appeared to be providing designated services without having enrolled; those that missed the 28-day enrolment window received notices. On the same reporting, around 90 per cent of businesses initially flagged had registered or attempted to, and registered real estate agencies rose from 17,970 on 20 August to 18,350 on 1 October, against roughly 45,000 offices nationally.

AUSTRAC chief executive Brendan Thomas put the posture plainly in comments to REB: “The small number that continue to ignore their obligations should not expect AUSTRAC to ignore them.”

Nothing in that suggests commercial brokers are a target. What it does establish is that the regulator is enforcing enrolment in the sectors where scope is settled. The practical protection commercial brokers have been operating under since July is AUSTRAC’s letter telling the FBAA that compliance work can wait — not a published carve-out. That is a reasonable thing to rely on, and it is also a thinner thing than a rule.

The two lines AUSTRAC’s guidance actually draws

If you set aside the sector question and read AUSTRAC’s item 4 guidance on its own terms, it draws two distinctions that are worth knowing regardless of how the broking question lands.

The first is between influencing a transaction and advancing it. AUSTRAC’s guidance says that “merely influencing how the customer proceeds, providing general advice or ancillary services isn’t sufficient”, and that “being connected to a transaction or outcome isn’t enough”. Its worked examples make the point concretely: a business consultant who gives general advice on financing options is not providing the service, because there is no transaction at that point, but the same consultant starts providing a designated service when they accept and act on the customer’s instructions to secure financing from identified investors. A credit rating agency is not captured, because its work influences but does not directly advance the transaction.

That distinction does not obviously help a broker. Taking instructions and acting on them to secure finance is close to a description of the job. It is, however, the distinction the regulator is working with, and it explains why the carve-out the FBAA describes is framed around the type of financing rather than the broker’s degree of involvement.

The second is the subject matter of the financing. Item 4 is confined to equity or debt financing relating to a body corporate or legal arrangement, existing or proposed. Financing for an individual or a sole trader in their own name is not within that description. Brokers who keep a mixed book may find that a meaningful share of their commercial files sit outside the item on that basis alone — but how any particular structure is characterised is a question for your licensee or compliance adviser, not something to settle from a guidance page.

Where the relief stops

This is the part of the 9 November statement most likely to be skimmed past. The FBAA’s own statement notes that brokers involved in broader corporate financing transactions, including capital raising and business acquisitions, could still have AML/CTF obligations. The clarification does not cover that work.

For a broker whose book is equipment, vehicles, working capital and trade facilities, that boundary is comfortable. For the growing number of commercial brokers who have moved up into business purchase funding, management buy-ins, shareholder buyouts and equity-and-debt packages, it is the whole question. A broker can have a book that is 85 per cent ordinary business lending and 15 per cent transactions that the proposed position expressly does not reach.

And the debt-financing question is only one item in table 6. Three others are worth reading if your work touches business sales:

• Item 2 covers assisting a person in the planning or execution of a transaction to sell, buy or otherwise transfer a body corporate or legal arrangement, in the course of carrying on a business, where the transfer is not pursuant to a court or tribunal order. Whether arranging the funding for a business purchase amounts to assisting in the planning or execution of the transfer is a different question from whether it is debt financing, and it does not depend on how AUSTRAC resolves the item 4 wording.
• Item 3 covers receiving, holding and controlling or managing a person’s money, accounts, securities or other property as part of assisting them in a transaction, subject to the exclusions in subsection 6(5C). Brokers do not typically hold client funds, but any arrangement where money moves through a related entity deserves a look.
• Item 6 covers assisting a person to plan or execute the creation or restructuring of a body corporate or legal arrangement — relevant to brokerages that sit alongside a structuring or advisory arm.

None of this is a conclusion about any broker’s position. These are general descriptions of statutory items, and the characterisation of a specific service is a matter for professional advice. The point is narrower: if your mental model is “AUSTRAC says brokers are out”, you have compressed a nine-item table into a single sentence that the FBAA’s own statement does not support.

What to review this week

None of the following requires building an AML/CTF program. All of it is file mapping, and it is the work that makes the next AUSTRAC announcement a five-minute read rather than a scramble.

1. Segment the commercial book by borrower type. Pull the last 12 months of commercial and asset finance settlements and split them by whether the borrower is a body corporate or legal arrangement, or an individual or sole trader in their own name. Item 4 only reaches the former.
2. Flag every file that is not ordinary business lending. Business purchases, share or unit transfers, shareholder buyouts, capital raisings, acquisition funding. These are the files the proposed position does not cover. Count them. If the number is more than a handful, that is a conversation with your licensee, not a note to self.
3. Write down what you actually do on an acquisition file. Not the loan — the transaction. Do you sit in the structuring discussion? See the sale contract? Coordinate with the accountant and the purchaser’s lawyer on timing of completion? That record is what any item 2 analysis will turn on, and it is much easier to write now than to reconstruct later.
4. Check whether any client money touches your entities. Deposits, holding accounts, disbursements through a related company. Most brokerages will answer no in one line. Document the answer.
5. Confirm what your lenders are relying on you for. Brokers have always supported lender due diligence through accreditation and process. Make sure your identity verification and record-keeping practices for commercial files are as good as your residential ones — that work has value whichever way the scope question lands.
6. Put a review date in the calendar. AUSTRAC has told the FBAA that preparation time would follow a decision that broking is in scope. Preparation time is only useful to a brokerage that knows which files it is preparing for.

What to watch next

The thing to watch for is an AUSTRAC publication, not another association update. The regulator’s position becomes operative when it appears in AUSTRAC’s guidance or the AML/CTF Rules — that is the document a compliance file can cite. Three specific things are worth monitoring: any revision to the equity and debt financing page that adds a statement on intended scope; any change to the examples list that currently includes asset financing; and any transitional arrangement or timeline attached to the announcement, which will tell you how long a captured brokerage would have to enrol and build a program.

Also worth watching is whether the clarification, when it comes, speaks to corporate and acquisition financing at all. Silence on that point would leave the harder half of the question exactly where it is now.

The broker takeaway

The FBAA has done the industry a service here, and the direction of travel is clearly favourable for brokers doing ordinary commercial and asset finance work. That is worth saying plainly.

But a proposed position described in an association statement is not the same instrument as a published regulator position, and the relief as described has a boundary that sits directly across the part of the market commercial brokers have been diversifying into. The brokerages that come out of this well will not be the ones that built an AML/CTF program they did not need. They will be the ones that spent an hour this month working out exactly which of their files sit on the far side of the line, so that when AUSTRAC finally publishes, they already know what it means for them.