Which business broking activities are designated services under Tranche 2?

AML/CTF Tranche 2 obligations do not apply to everything a business broker does. They apply to specific activities. Whether your business broking is captured depends on what you actually do in the deal, not how the business describes itself or the type of clients it typically serves.

Business brokers may have AML/CTF obligations where they are actively facilitating or implementing certain transactions. This can include assisting with restructuring or transferring companies, trusts or other legal arrangements, the purchase or sale of real property, business sales or financing transactions, or acting in nominee, fiduciary or intermediary roles. The rationale is that these services can be used (or misused) to obscure the origin or ownership of funds or assets.

Importantly, business brokers advising or acting generally on the sale and purchase of business assets will not be a designated service. Similarly, purely ancillary or advisory services such as valuation and strategy advice are not designated services on their own. But there are important checks to run before relying on this position, because in some circumstances the AML/CTF Act's anti-avoidance provisions may be engaged (see below).

Anti-avoidance: a particular risk for brokers

The AML/CTF Act includes robust anti-avoidance provisions aimed at preventing individuals or entities from circumventing reporting obligations. A relevant worked example for brokers: if a broker advises a client not to proceed with a proposed sale and purchase of shares in a company and instead to structure the deal as a sale and purchase of all that company's assets, and this is done to avoid the AML/CTF regime, the anti-avoidance provisions will catch it. Consequences are severe and include exposure to civil and criminal penalties.

The practical implication is that brokers need to be cautious when advising on whether to proceed with one form of transaction over another, particularly where one transaction structure would be captured by the AML/CTF Act and another would not. Compliance systems and protocols should be designed to prevent AML/CTF avoidance through transaction structuring, and the rationale for any structure recommendation should be documented contemporaneously.

Compliance obligations where designated services are provided

From 1 July 2026, a broker providing designated services must enrol with AUSTRAC and:

Assess ML/TF risks and develop an AML/CTF Program.
Appoint an AML/CTF Compliance Officer.
Conduct due diligence on workforce and provide AML/CTF training.
Conduct initial CDD on clients, including identity verification and beneficial ownership.
Conduct ongoing due diligence and transaction monitoring.
Be prepared to make suspicious matter reports.
Maintain records of activities and compliance.

The nine items below set out the designated services in Table 6 of the AML/CTF Act as they apply to business broking, with the typical activities that are in scope and those that sit outside.

Item 1 - Assisting a person in the planning or execution of a transaction to sell, buy or transfer real estate

Designated services: Acting in property conveyancing or settlements, including preparing, reviewing or lodging contract-of-sale documents; researching property titles and strata documents; holding and releasing deposit or settlement funds in relation to the conveyance; coordinating payments and discharge of mortgages; executing property transfers (other than transfers required by court order).

Not designated services: Leases of 30 years or less; advising on general property law issues including incorporeal hereditaments (intangible, inheritable property rights attached to land); acting in property litigation; property disposals as part of probate or as a result of a court or tribunal order (e.g. Family Court orders).

Item 2 - Buying or selling a body corporate or legal arrangement

Designated services: Conducting due diligence; acting for a seller or buyer in a share or unit-trust sale; transferring ownership of a trust interest; preparing and executing transfer documents, share-sale agreements and other contracts.

Not designated services: Sale and purchase of minor interests (generally less than 25% of the shares or other interests in the company or legal arrangement); purely advising on deal-structure options without executing transfers.

Item 3 - Receiving, holding, controlling or managing property (usually funds)

Designated services: Holding property in escrow; managing escrow funds to enable a transaction; receiving, holding and transferring client funds through a trust account as part of a transaction; having authority for a client's bank account and making transactions on their behalf.

Not designated services: Holding or receiving funds in a trust account for prepayment of the broker's services; for use, maintenance, repair or oversight of property; for payment under a court or tribunal order (e.g. reviewing a judgement sum for a client); or when receiving funds from government, courts, tribunals, insurers or other specified entities.

Item 4 - Assisting in organising, planning or executing equity or debt financing involving a body corporate or legal arrangement (including proposed ones)

Designated services: Drafting and executing loan documents for a company; drafting equity fundraising documents (venture capital, IPOs, share purchase plans, ESOPs); coordinating drawdowns on a financing arrangement; working to execute a financing transaction.

Not designated services: Providing general or strategic advice on financing options (debt or equity); preparing options presentations or papers and discussing options; arranging finance for yourself, including for your own body corporate or legal arrangement.

Item 5 - Assisting a person in selling or transferring a shelf company in the course of a business

Designated services: Facilitating the transfer of a company that you have pre-incorporated. This typically occurs in the course of a business that establishes shelf companies and then offers them for sale.

Not designated services: Strategic advice such as assisting with decisions to acquire a company that has not traded; arranging for someone else to incorporate a company for a client where the client will be shareholder and director; providing administrative services to apply to ASIC to register a company for a client (where the client is the shareholder and director and you have not given planning or structuring advice).

Item 6 - Assisting in creating or restructuring a body corporate or legal arrangement

Designated services: Preparing documents in anticipation of creating a body corporate or legal arrangement (drafting, reviewing or negotiating corporate agreements and business documents); drafting and reviewing trust deeds in relation to the creation or restructure of a trust; drafting documents to create an association or co-operative; lodging company and business-name applications and forms with ASIC where you have provided the client with planning or structuring advice; applying for regulatory approvals and waivers (ASX, ASIC, FIRB); conducting due diligence in respect of a transaction.

Not designated services: Purely advisory work, for example high-level organisational structure advice without preparing any instruments and without a transaction; dealing with operational, IT and other management functions; drafting a will, even where it includes the subsequent creation of a testamentary trust; creating or restructuring a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth).

Item 7 - Acting in or arranging specified roles (directors, powers of attorney for non-natural persons, partners, etc.)

Designated services: Acting as company director on behalf of a customer, or arranging for someone to act in a specified role - director, secretary, power of attorney, partner or trustee. Drafting a power of attorney for a corporation.

Not designated services: Acting for a natural person under a power of attorney; acting under a court-appointed fiduciary role; acting as trustee of a regulated debtor's estate, including as trustee of a testamentary trust.

Item 8 - Acting as or arranging a nominee shareholder of a body corporate or legal arrangement on behalf of someone in the course of a business

Designated services: Preparing a nomination document; identifying or arranging a person to act as a nominee shareholder; holding shares on behalf of another under instruction; arranging a nominee shareholder to act for a client.

Not designated services: Purely advising on nominee structures without acting as nominee; acting as a nominee solely due to a court order.

Item 9 - Providing a registered office or principal place of business

Designated services: Providing the firm's address as the registered office of a client company.

Not designated services: Enabling a client to use offices for meetings or administrative support functions; providing a postal address that is not the client's registered office or principal place of business.

Important: the items above set out the typical patterns under each Item of Table 6. They are general guidance, not a determination - whether a specific activity is a designated service depends on the actual conduct and the surrounding facts. The anti-avoidance considerations above mean a structure that looks "outside scope" needs to be tested against the reason for choosing that structure. For matters where the position is unclear, the broker should consider obtaining independent legal advice before assuming a service sits inside or outside scope.

AML/CTF compliance represents a shift in professional risk management rather than a purely technical exercise. It introduces expectations around structure, consistency and documentation in areas of practice that have traditionally relied heavily on individual judgement. Done well, it supports clearer client understanding, sharper engagement boundaries and stronger internal controls alongside meeting the regulatory requirements.

See AUSTRAC's Professional designated services page.

Related entries:

Are business brokers captured if they only sell the business itself, not the freehold? (short-form quick answer)
Which legal practice activities are designated services under Tranche 2? (parallel anchor entry for legal practices)
Are shelf company sales a designated service? (Item 5 detail)
Are wholesale company incorporation services a designated service? (Item 6 wholesale-incorporator nexus test)

Which business broking activities are designated services under Tranche 2?

Specific business broking activities that trigger AML/CTF obligations, including structuring transfers, holding funds, and acting in nominee or fiduciary roles.

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