AUSTRAC has updated its statement on the unintended
exemption of managed investment schemes from the operation of
the Anti-Money Laundering and Counter-Terrorism Financing
Act 2006 (AML/CTF Act). The revised
statement is dated 21 December 2007 (the previous statement
dated 11 December 2007 no longer appears on AUSTRAC's
website). It can be found by clicking here.
AUSTRAC's revised update states that the Government
intends to make a regulation as soon as possible to ensure that
businesses that issue interests in managed investment schemes
are subject to obligations under the AML/CTF Act. The
information update also indicates that these obligations will
not be retrospective. The regulation will need to be tabled in
Parliament and may be disallowed by either House within 15
sitting days. However, the regulation can take effect
immediately on being made.
The AUSTRAC statement does not mention whether the
regulation will maintain a carve out for listed trusts and
stapled securities, including for pre-listing issues of units.
Clarification of this issue appears necessary.
Section 235 of the AML/CTF Act provides a defence
against criminal and civil proceedings for persons acting in
good faith purported compliance with the Act. Unless the Act
is amended, this defence may not be available for
issuers who seek to collect customer identification information
and manage money laundering and terrorism financing risks in
relation to managed investment schemes before the proposed
regulation is made.
New Draft Rules
AUSTRAC has also proposed new draft rules which can be found
by clicking here.
Unfortunately, the explanatory note which accompanies them does
not shed much light on the proposed rules.
Application of customer identification procedures to
takeovers, schemes of arrangement and mergers and
It is not clear how this Rule would apply given the
exemption for issuing securities in item 35(b). The Rule
also refers to disposing of part of a business which is
not a designated service (unlike selling securities).
Delayed customer identification for issuing securities
and accepting retirement savings account (RSA)
contributions, roll-overs and transfers.
The rationale for this Rule is also unclear given the
exemption for issuing securities and also the customer
identification exemption for RSA contributions.
Extension of institutions that make electronic funds
transfers to include, among others: lenders, stock
brokers, investment managers, security issuers and
sellers, investment life insurers, pension and annuity
providers, superannuation funds and foreign exchange
This means that these institutions may be providing a
separate designated service when facilitating a payment
to another person or an account at another institution.
They may also need to pass on name, address and account
number details to AUSTRAC or the other financial
institution on request.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
There has been a range of recent legal developments that affect privacy, child abuse claims and workers compensation.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).