Tranche 2 Reforms Explained
A practical guide to what you need to know and do to prepare for Australia's expanded AML/CTF regulations.
Last updated: September 2026
Feeling overwhelmed by the upcoming Tranche 2 reforms? You're not alone.
Many Australian businesses are unsure of what is required, when to act, or how to begin preparing for these significant changes. This guide is designed to cut through the noise, providing you with clear, actionable insights to prepare calmly and confidently.
Tranche 2: What it is and who it impacts
What is Tranche 2?
Tranche 2 refers to the expansion of Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws, extending obligations to previously unregulated industries. These reforms are crucial for strengthening Australia's ability to combat financial crime and meet international standards.
The legislation passed Parliament on 29 November 2024 and received Royal Assent on 10 December 2024.
Who will be affected?
From 1 July 2026, Tranche 2 will likely apply to your business if it offers designated services typically provided by:
Real estate agents, buyer's agents, and property developers
Lawyers and legal practitioners
Accountants, bookkeepers, and tax agents
Conveyancers and settlement agents
Dealers in precious metals and stones (cash/crypto ≥ $10,000)
Trust and company service providers (TCSPs)
Virtual asset service providers (VASPs)
Important note: Virtual asset-related obligations begin earlier, on 31 March 2026.
What does "designated service" mean?
If your business performs certain financial, legal, or transactional services known as "designated services," you are classified as a reporting entity under the AML/CTF Act. These include assisting clients with buying or selling property; managing money, assets, or legal entities on behalf of others; handling large cash or cryptocurrency transactions; and providing services related to trusts, companies, or virtual assets.
Not sure if Tranche 2 applies to you? Use AUSTRAC's eligibility checker or contact our team for guidance.
Quick guide to key terms
AML
Anti-Money Laundering
CTF
Counter-Terrorism Financing
AUSTRAC
The government regulator overseeing AML/CTF compliance
CDD
Customer Due Diligence (knowing and verifying your customers)
PF
Proliferation Financing
SMR
Suspicious Matter Report (filed when something doesn't look right)
Tranche 2
The second phase of AML/CTF reforms, extending to new sectors
TTR
Threshold Transaction Report (cash transactions ≥ $10,000)
VASP
Virtual Asset Service Provider (crypto wallets, exchanges, etc.)
Why this matters: Beyond ticking boxes
AML/CTF laws aren't just about compliance. They're about protecting people.
Criminals use financial systems to disguise the movement of funds linked to illegal activity. This includes fraud, terrorism, trafficking, child exploitation, and other serious crimes. Businesses play a key role in detecting and disrupting those activities.
You're not being asked to solve crimes. Simply to report certain matters. By verifying customers and monitoring transactions, and reporting suspicious behaviour, your business helps protect the wider community, contributing to a safer Australia.
Your key obligations under Tranche 2
If your business provides one of the newly regulated services, here's what you'll be expected to do:
What compliance looks like in practice
Tranche 2 compliance is not a one-off task. It's an ongoing process that needs to be built into how your business operates.
1. Enrol
- Register with AUSTRAC
- Appoint compliance officer
- Set up reporting channels
2. Assess Your Risk
- Conduct ML/TF/PF risk assessment
- Identify customer risk factors
- Document risk methodology
- Create risk matrix
3. Implement Your Program
- Develop written AML/CTF policies
- Create CDD procedures
- Design transaction monitoring
- Build reporting processes
- Get senior manager approval
4. Train Your Team
- Develop role-specific training
- Conduct initial training for all staff
- Implement new employee onboarding
- Establish clear reporting lines
5. Monitor and Improve
- Conduct customer due diligence
- Monitor transactions continuously
- Review customer risk ratings
- Track regulatory changes
- Conduct internal audits
6. Report as Required
- Submit SMRs within required timeframes
- File TTRs for $10,000+ cash transactions
- Submit annual compliance reports
- Maintain 7-year records
Key dates and timeline
Days until Tranche 2 obligations commence
0
1 July 2026
Important: Instant Compliance is software, not compliance advice.
Our tools help you prepare, record and manage an AML/CTF program. They do not provide legal or compliance advice and do not guarantee compliance with the AML/CTF Act. Your business remains responsible for meeting its own obligations and for every decision it makes using these tools. Instant Compliance is an independent software provider and is not affiliated with, endorsed by or acting on behalf of AUSTRAC or any government body. Read what we do and what stays your responsibility
2025
- June: Start your compliance journey: educate yourself
- July-Aug: Public consultation on draft rules, Core guidance published
- September: Learn about changes in detail, Conduct gap analysis
- October-Nov: Conduct awareness sessions, Risk assessment
- December: Sector-specific guidance finalised
2026
- January: Choose AML provider or develop internal processes
- February: Execute: adopt your AML/CTF program
- March 31: AUSTRAC enrolment opens (CRITICAL DATE)
- April-May: Finish system setup, Deliver staff training, Trial run
- June: Final preparation and review
- July 1: OBLIGATIONS COMMENCE
- July 29: Final deadline to enrol with AUSTRAC
How Instant Compliance helps
We understand that many businesses feel time-poor, overwhelmed, and unsure where to start with these new regulations. This is where Instant Compliance steps in.
We aim to make the work of running an AML/CTF program clearer and more manageable. Instant Compliance provides AML/CTF compliance software built for Australian businesses.
Clarity
We simplify complex requirements into plain, actionable steps.
The tools
Risk assessment, draft program documents, KYC/KYB, training, transaction monitoring, report preparation and record-keeping.
Local, Responsive Support
Our Australian team understands your industry and is here to help when you need it.
Kept updated
We update the software as laws and guidance change. Checking your program reflects current requirements remains your responsibility.
Pricing: Solo plan from $69/month when billed annually ($828/year), or $89/month monthly, with $50 free credit for new customers.
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Note
This guide was last updated in September 2026. We update the software as laws and guidance change. Checking that your program reflects current requirements remains your responsibility.