The proposed amendments will exempt Reporting Entities from certain identification requirements in Chapter 4 and Chapter 15 of the AML/CTF Rules for corporate customers who are ‘custodians’.

Industry has informed AUSTRAC that there are difficulties complying with the requirements in Part 4.4 (Applicable customer identification procedure with respect to trustees) of Chapter 4 of the AML/CTF Rules, as many custodian arrangements do not have the normal trust features such as trust name, settlor, and a trust deed.

AUSTRAC has considered the issues raised by industry, and is proposing to provide targeted regulatory relief.

The proposed exemption will apply to corporate custodian customers that:

  • act in the capacity of a trustee;
  • are providing a custodial or depository service; and
  • hold an AFS Licence authorising them to provide custodial or depository services, or are exempt under the Corporations Act 2001 from the requirement to hold such a licence.

The definition of ‘custodian’ limits the exemption to corporate custodians, rather than individuals who provide custodial or depository services.

New proposed paragraphs (4.4.18 and 4.4.19) have been added to Part 4.4 to exempt Reporting Entities from carrying out specific applicable customer identification requirements when providing designated services to eligible custodians.

As a result of these changes, Reporting Entities will also be exempt from conducting certain ongoing CDD requirements in Chapter 15 of the AML/CTF Rules regarding the collection and verification of beneficial owner information (although it should be noted that Reporting Entities will still be required to comply with obligations in Chapter 15 of the AML/CTF Rules regarding the collection, verification, update, and review of KYC information on the custodian in its capacity as trustee of the trust).

The consultation period has closed.

The Consultation Paper is available at:

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