Tranche 2 Is Coming: What Accounting Firms Need to Do Before 1 July 2026

Accounting practices in Australia may soon be required to comply with anti-money laundering laws. Starting 1 July 2026, many firms must have a formal Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) program to keep offering certain services.

To help firms get ready, AUSTRAC has released an Accounting Program Starter Kit made for small, low-complexity accounting practices that gives a practical starting point for meeting the new rules.

This guide explains what the Starter Kit is, who needs it and why it’s important to start preparing now.

Quick links:

• Why accountants are now in scope
• Does this actually apply to my firm?
• What is the AUSTRAC Starter Kit?
• AUSTRAC’s three-step approach
• Other key obligations firms need to know about
• When the Starter Kit may not be enough
• What accounting firms should do now
• How can BGL help accounting firms?
  • Client identity verification with BGLiD
  • BGL’s AML/CTF webinar series
• What’s next: Integrated AML/CTF program management
• The bottom line

Australia’s AML/CTF reforms, known as Tranche 2, significantly expand the regulatory framework to include entities beyond banks and traditional financial services.

From 1 July 2026, accounting firms that provide certain designated services will be classified as reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

This requirement extends beyond compliance. Reporting entities must identify, assess and manage money laundering and terrorism financing risks within their practice. Non-compliance may lead to regulatory action, financial penalties and reputational harm.

AUSTRAC has adopted a practical approach for smaller firms by publishing a Starter Kit that simplifies the initial compliance process.

Not every accounting practice is automatically captured. The obligations apply based on what services you provide, not simply because you’re an accountant.

Under Table 6 of the AML/CTF Act, accounting firms are in scope if they provide any of the following designated services:

Assisting with real estate transactions

Actively assisting clients with the sale, purchase or transfer of property, beyond providing general advice, constitutes a designated service.

Assisting with the sale or transfer of a company or legal arrangement

This includes assisting clients with the purchase, sale or restructuring of companies, trusts, partnerships or similar entities.

Receiving, holding or managing client funds or property

Many accounting firms fall within this category. Holding client funds in trust, managing disbursements or controlling accounts during transactions can trigger AML/CTF obligations.

AUSTRAC has clarified that an exception applies when funds are held solely as payment for your services or are incidental to a non-designated service. Using a trust account as a substitute for a banking facility does not qualify for this exception.

Arranging corporate appointments or nominee services

Acting as or arranging for someone to act as a director, trustee, partner or nominee shareholder on a client’s behalf is also a designated service.

If your firm provides any of these services, you must have an AML/CTF program in place to continue offering them after 1 July 2026.

Common misconception:

“We don’t handle cash, so AML doesn’t apply to us.”

In practice, many accounting firms are subject to these obligations due to their involvement in transactions, restructures or trust accounts, rather than handling physical cash.

The AUSTRAC Accounting Program Starter Kit is a pre-built AML/CTF framework designed for small, low-complexity accounting practices.

It includes two core components:

A money laundering and terrorism financing risk assessment

This helps firms identify common risks relevant to accounting practices, based on AUSTRAC’s understanding of how professional services can be exploited for financial crime. It considers client types, services provided and transaction patterns.

AML/CTF policies and procedures

These outline the controls firms need to implement, including customer due diligence, ongoing monitoring, suspicious matter reporting, staff training and governance arrangements. The documents are provided as working templates that can be customised to reflect how your firm actually operates.

Use of the Starter Kit is not mandatory, but AUSTRAC actively encourages it. For many small practices, it provides a compliant baseline with relatively modest tailoring required.

AUSTRAC structures the Starter Kit around a simple, practical process:

Step 1: Customise your program

Review the risk assessment and policies and tailor them to your firm’s services, clients and risk profile.

Step 2: Use your program

Put the program into practice. This encompasses conducting customer due diligence, training staff to recognise red flags and having well-defined procedures for reporting suspicious matters to AUSTRAC.

Step 3: Maintain and review your program

An AML/CTF program isn’t a set-and-forget document. It must be reviewed regularly, particularly when services change or new risks emerge.

The Starter Kit supports your AML/CTF program, but it doesn’t replace other regulatory obligations.

AUSTRAC enrolment

Enrolment opens on 31 March 2026 and must be completed within 28 days of providing a designated service.

For firms already providing designated services on 1 July 2026, enrolment must be completed by 29 July 2026. With tens of thousands of businesses expected to enrol, starting early will help prevent last-minute pressure.

Appointing an AML/CTF Compliance Officer (AMLCO)

Every reporting entity must appoint an AMLCO who meets AUSTRAC’s “fit and proper person” requirements. The role can be internal or outsourced, but the person must have genuine authority and oversight.

Staff training

Staff need to understand how AML/CTF risks arise in the context of your firm’s work and what to do when something doesn’t look right.

Record keeping

Firms must retain records of customer due diligence, suspicious matter reports and evidence that the AML/CTF program is being followed and reviewed.

The Starter Kit is intended for small, low-complexity practices. Firms may need a more tailored AML/CTF program if they:

• Operate internationally or have overseas clients
• Regularly deal with complex structures or higher-risk clients
• Handle large transaction volumes or significant sums
• Provide virtual asset-related services
• Are part of a larger group or network of firms

In these cases, the Starter Kit can still be a useful starting point, but specialist advice may be appropriate to ensure the program fits the firm’s actual risk profile.

With 1 July 2026 approaching, there are some concrete steps firms can take:

1. Confirm whether you’re in scope by mapping your services against the designated services list.
2. Read the Starter Kit to understand what AUSTRAC expects in practice.
3. Prepare for enrolment early, gathering governance and business information in advance.
4. Identify your AMLCO, whether internal or external.
5. Plan staff training so it’s completed before obligations commence.

BGLiD is a purpose-built client identity verification solution designed to help accounting practices meet these new obligations quickly, securely and with minimal friction, all within your existing BGL software.

Here’s how BGLiD supports your AML/CTF compliance:

• Seamless verification within your workflow
  BGLiD integrates with CAS 360, Simple Fund 360 and Simple Invest 360, meaning you can manage identity checks without adding extra apps or manual steps.
• Trusted and secure checks
  It verifies client identity using official government ID sources, anti-money laundering databases, global sanctions lists and adverse media checks, supported by AI-powered biometric face matching.
• Instant results and audit records
  Identity verification results are delivered quickly and can be stored against client records, helping you demonstrate compliance and keep evidence organised for audit or review.
• No complex setup or training needed
  Because BGLiD is built into your BGL software ecosystem, there’s no separate installation or steep learning curve — it works straight away within your familiar systems.

By embedding identity verification and client screening into your normal workflows, BGLiD helps reduce the operational burden of compliance while strengthening your firm’s ability to know your client and manage risk proactively.

We’re running a free AML/CTF Webinar Series to provide you with practical guidance and the right tools to meet your obligations with confidence.

Identity verification is just the beginning. BGL is developing a modular, end-to-end AML/CTF compliance solution designed specifically for Tranche 2 professional services firms, built to work alongside the Starter Kit framework rather than replace it.

BGL’s roadmap includes:

Know Your Business (KYB) and beneficial ownership tracing. Automated registry lookups for Australian companies and trusts, with graphical views of corporate structures and ultimate beneficial owners — essential for accountants working with complex entities.

Risk assessment and case management. Tools to document client and engagement-level risk assessments, track CDD and EDD checklists and manage approvals — all integrated into your existing CAS 360 workflows.

Ongoing due diligence and monitoring. Automated re-verification schedules, PEP/sanctions/adverse media alerts and review triggers that help you stay on top of changing client circumstances without manual tracking.

Policy and program management. Version-controlled templates aligned to AUSTRAC’s Part A and Part B program structure, making it easier to maintain and demonstrate compliance over time.

Audit-ready evidence and reporting utilities. Comprehensive evidence packs, draft suspicious matter report tools and board/AMLCO reporting dashboards are designed to make regulatory reviews straightforward rather than stressful.

The goal is simple: make compliance invisible by embedding AML/CTF obligations directly into the work you’re already doing, inside or outside the BGL Suite. You shouldn’t need to manage compliance in a separate system, nor become an AML expert to run a compliant practice.

BGL’s approach is modular by design; firms can adopt the pieces they need as their obligations and complexity grow, starting with identity verification today and adding program management, monitoring and reporting capabilities as the regulatory requirements firm up.

The Tranche 2 AML/CTF reforms represent a major change for accounting firms. AUSTRAC’s Accounting Program Starter Kit makes it easier to get started. However, firms still need to actively engage with the requirements, tailor the program and embed it into day-to-day operations before the deadline.

The firms that will manage this transition most smoothly are the ones that start preparing now.

You can access the full Starter Kit and supporting guidance on the AUSTRAC Accounting Program Starter Kit page.