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Can two separate businesses be CO / 2IC for each other's accounts during leave?

Yes, reciprocal 2IC arrangements between two firms are fully supported and a common pattern for small firms where in-house deputy coverage is not practical.

Yes. A reciprocal 2IC arrangement between two firms is fully supported and is a common pattern for small firms where in-house deputy coverage isn't practical. AUSTRAC's framework permits an external 2IC provided they meet the integrity, residency and training requirements - easyAML enforces those automatically.

How to set up:

  1. Firm A's CO invites Firm B's CO into Firm A's account as Compliance Officer 2IC. Use the email Firm B's CO already uses to log into Firm B's account.
  2. Firm B's CO accepts, sets up MFA on their existing credentials, and completes Firm A's sector-specific training (modules already completed under Firm B carry over via the shared email).
  3. Firm B's CO repeats the process in reverse, inviting Firm A's CO into Firm B's account as 2IC.
  4. Both COs now have deputy coverage when their counterpart is on leave.

Practical considerations:

  • Confidentiality. The reciprocal CO sees Firm A's customer data while standing in. A confidentiality agreement between the firms is sensible.
  • Conflict of interest. Make sure the firms don't have overlapping customers - a 2IC at Firm A who personally acts for the same customer at Firm B creates an awkward conflict.
  • Independence and integrity. The 2IC still needs to be a fit-and-proper person, Australian-resident where services are provided locally, and capable of exercising independent judgement.
  • Sector match. Easier where both firms operate in the same sector (two conveyancing firms, two accountants) - the AML/CTF Program structure is more familiar.

See AUSTRAC's AML/CTF Program reform materials.

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