Questions Regarding Designated Services

Q: What is meant by residential property management not being covered as a designated service? A: Residential property management is specifically excluded from designated services under the AML/CTF Act. Routine property management (rent collection, maintenance, tenant management) is NOT a designated service. However, involvement in property transactions (buying/selling property, assisting in transfer of property) is a designated service.

Q: Are mortgage and finance brokers covered under designated services? A: No generally, mortgage brokers are registered under Australian Financial Services Licence (AFSL) instead. There may be specific other designated services they provide, each broker would need to ensure they are fully compliant.

Q: Do bookkeepers (BAS agents) with access to client bank accounts need to register? A: Having access to a client bank account to process routine payments does not constitute a designated service. However, if you're receiving, holding, and controlling funds as part of specific transactions (like asset purchases), you may need to register. The key distinction is whether you're managing funds for routine operations versus transaction-specific purposes.

Q: Does holding funds in trust for probate work require registration? A: This is likely to be clarified when sector specific guidance is released. Typically, assisting with the sale or transfer of property can be considered a designated service under Item 1 of Table 6. The key point is whether the transfer is due to a court order.

If the property transfer is based on the terms of a will (which has been validated by the court but not directly ordered), it usually remains a designated service. However, if a court is directly involved (ie in cases of contested wills or intestacy), the transfer may be considered to be under a court order and therefore not a designated service.

Q: Are financial advisers who deal with retirees covered? A: Only if they're providing designated services such as receiving, holding, or managing client funds or providing specific advice as part of specific transactions, rather than just providing advice. Most financial advisers providing advice to retirees won't be caught by Tranche 2.

Financial planners (specifically Australian Financial Services Licensees - AFSLs) are already reporting entities under Australia's Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). They are required to register with AUSTRAC, conduct customer identification (KYC), and report suspicious matters.

Q: What about strata management? A: Strata managers must assess whether their services constitute designated services. Routine levy collection and operations management typically don't qualify, but involvement in property transactions on behalf of owners will require registration. 

Q: Is there a minimum business size for registration requirements? A: No. If you provide designated services, you must register regardless of business size - whether you're a sole practitioner or a large organisation.

Q: What about real estate businesses with independent contractors? A: Independent contractors can typically report under the real estate company's registration if they're operating as part of that business structure. Consult AUSTRAC on your specific arrangement to ensure it meets requirements.