Exemptions from AML/CTF obligations for businesses providing only item 54 designated services — AUSTRAC — AU

Learn about the anti-money laundering and counter-terrorism financing (AML/CTF) exemptions that apply if you only provide item 54 designated services.

You are exempt from certain AML/CTF obligations if the only designated service you provide is item 54 of table 1 in section 6 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act).

Designated service item 54 of table 1 in section 6 of the Act applies when you are:

providing services in the capacity of the holder of an Australian financial services licence (AFSL), and
making arrangements for a person to receive another designated service (other than a service covered by item 54).

You must be making the arrangements as part of the activities you are authorised to carry on under the AFSL, not in a separate capacity.

Obligations you must comply with

If you only provide item 54 designated services, you must still comply with certain obligations under the Act.

You must:

enrol with us
conduct a ML/TF risk assessment
develop, maintain and comply with AML/CTF policies that cover initial CDD and are appropriate to the ML/TF risks you may reasonably face
conduct initial CDD before you start to provide a designated service
document your AML/CTF program
have a senior manager approve your ML/TF risk assessment and AML/CTF policies, including updates to either
report suspicious matters
keep records to demonstrate compliance with your AML/CTF program obligations
comply with tipping off obligations.

Exemptions from certain obligations

This section refers to the Act sections 26T, 30(10), 39(7), 44(6) and 47(5).

If you only provide item 54 designated services, you are exempt from the obligations to:

notify your governing body in writing of updates to your ML/TF risk assessment
have governing body oversight of the ML/TF risk assessment and compliance
ensure the governing body is informed of ML/TF risks
appoint an AML/CTF compliance officer
conduct ongoing CDD, including monitoring for unusual transactions and behaviour, and reviewing or updating customer information
conduct personnel due diligence or training for AML/CTF-related roles
have an independent evaluation of your AML/CTF program conducted at least once every 3 years
report threshold transactions
submit an annual compliance report.

These exemptions apply if you provide item 54 designated services and provide no other designated services.

You only need AML/CTF policies in relation to undertaking initial CDD that are appropriate to the ML/TF risks that you may reasonably face in providing designated services.

If you provide any designated services other than item 54, the exemptions described above don’t apply. This means that you will be required to meet all AML/CTF obligations when providing an item 54 designated service, with the exception of ongoing CDD under section 30.

Customer due diligence exemption for certain services

You do not need to carry out CDD if the item 54 designated service relates to making arrangements for a person to receive one of the following designated services:

accepting payment of the purchase price for a new pension or annuity
accepting a superannuation contribution, rollover or transfer
accepting a retirement savings account (RSA) contribution, rollover or transfer.

This exemption only applies to CDD obligations and does not affect your other AML/CTF obligations, including suspicious matter reporting.

Determining if you are providing an item 54 designated service

To be providing an item 54 designated service, you must be both:

acting in the capacity of the AFSL holder
making arrangements for a person to receive a designated service other than item 54.

In practice, you may be making arrangements where you take steps that enable a person to receive another designated service that is also a ‘financial service’ under the Corporations Act 2001. This can include:

introducing the person to a dealer of financial products
coordinating the steps needed for a financial product or custodial service to be provided
helping the person complete and submit documentation needed for another designated service.

Authorised representatives of AFSL holders

Item 54 applies to the holder of an AFSL. In practice, AFSL holders often provide item 54 services through authorised representatives.

If you provide services as an authorised representative, the AFSL holder is the reporting entity for item 54 services you provide on their behalf. Authorised representatives are not reporting entities if they only provide item 54 services on behalf of an AFSL holder.

Where item 54 services are provided through authorised representatives the:

AFSL holder is the reporting entity for those item 54 services
authorised representatives provide the service on behalf of the AFSL holder
authorised representatives must follow the AFSL holder’s AML/CTF program as it applies to the service.

The AFSL holder remains responsible for meeting AML/CTF obligations for the item 54 services it provides, including through its authorised representatives.

If an authorised representative separately provides a designated service other than item 54, they will be a reporting entity in relation to that service. The item 54 exemptions described on this page won’t apply to them for that other service.

What is ‘making arrangements’

The term ‘making arrangements’ in item 54 refers to taking steps that enable a person to receive a designated service, rather than providing that designated service yourself.

Making arrangements can include any scheme, plan, proposal, action, course of action or course of conduct that enables a person to receive a designated service.

'Making arrangements' isn’t limited to the concept of 'arranging' in section 766C of the Corporations Act 2001. You don’t need to be authorised to 'arrange' under section 766C to be 'making arrangements' for the purposes of item 54. The focus is on whether your actions, in the capacity of an AFSL holder, enable a person to receive a designated service.

To understand whether you are ‘making arrangements’, you’ll need to understand which designated services you enable a person to receive, and whether those services are also financial products or financial services under the Corporations Act.

If you take the same steps outside your AFSL holder capacity, item 54 won’t apply.

Types of activities that may be ‘making arrangements’

Activities that may be 'making arrangements' include, but are not limited to:

negotiating terms and conditions with a product issuer on a person’s behalf
helping a client complete application, rollover or transfer forms
helping to set up or progress a request to transfer funds to a product issuer on a person’s behalf, where the transfer requires the person’s approval or authentication and you cannot complete or prevent the transfer yourself.

Other professional designated services

We also regulate other professional designated services set out in table 6 of section 6 of the Act. If you provide other professional designated services, the exemptions on this page do not apply.

Our professional designated services guidance explains the professional services we regulate, including examples.

Interaction between item 3 of table 6 and item 54

This section refers to the Act sections 6(5B) and 6(5C)(e).

Some activities which constitute an item 54 designated service may also involve providing item 3 of table 6. For example, when helping a client access a financial product provided by another reporting entity, you may receive, hold, and control their money or give instructions as part of that process.

The item 3 designated service applies where all of the following apply:

You receive, hold and control (including disburse), or manage, a person’s money or other property
This happens as part of assisting the person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, and your actions directly advance the transaction (rather than merely influencing it)
The service is provided in the course of carrying on a business
None of the circumstances in subsection 6(5C) apply (see Exemptions from the item 3 designated service below).

The Act recognises that these activities can overlap. Where the same activity is covered by another designated service (including item 54), item 3 does not apply to that activity.

How to work out which designated service applies

You can use the following steps to determine which designated service applies:

Are youreceiving, holding and controlling (including disbursing), or managing, a person’s money or other property as part of assisting them in the planning or execution of a transaction, or otherwise while acting for or on their behalf in a transaction?
If yes, are you doing this as an AFSL holder making arrangements for another person to provide a designated service?

If yes to both steps, you are taken to be providing only an item 54 designated service. Item 3 does not apply to this activity.

If yes to step 1 only, you are providing an item 3 designated service.

If yes to step 2 only, you are providing an item 54 designated service.

What this means in practice

If you receive, hold, control, or manage a person’s money or other property as an AFSL holder when making arrangements for your customer to receive a designated service, you are taken to only be providing an item 54 designated service.

If you provide an item 3 designated service to a customer outside of making arrangements for your customer to receive another designated service, this is treated as a different activity which is not covered by item 54.

If you provide both item 54 services and item 3 services in different circumstances, the item 54 exemptions on this page do not apply because item 54 is not the only designated service you provide.

Interaction with other professional designated services

Other professional designated services in table 6 may apply where you directly advance a transaction or legal outcome, rather than merely influencing or facilitating it.

Where you take steps that directly create, alter or carry out the transaction or legal arrangement yourself, you are more likely to be providing a professional designated service in table 6 rather than item 54.

Example: Financial adviser using a wrap account – interaction between item 3 and item 54

Examples are illustrative only. Whether a designated service applies will depend on the specific activities you undertake in each case.

A client holds investments through a wrap account. The wrap account provider may require transfer requests to be submitted through the client’s financial adviser, and the client may also need to approve or authenticate the request before the wrap account provider processes it.

Scenario A: passing on client instructions

The client gives a specific instruction to transfer a fixed amount from the wrap account to the client’s linked bank account. The adviser completes and submits the wrap account provider’s request form as instructed. The wrap provider processes the request and transfers the funds to the linked account.

In this scenario, the adviser is likely to be making arrangements for the client to receive a designated service. The adviser doesn’t receive, hold and control, or manage the client’s money, and the adviser is providing an item 54 designated service.

Scenario B: discretionary authority to make investment decisions

The client gives the adviser authority to make investment decisions on the client’s behalf within agreed investment principles. The adviser decides when to buy or sell investments and instructs third parties (such as the wrap account provider) to carry out those decisions.

The service of managing the client’s investments under this discretionary authority is separate from the provision of the wrap account itself, which is a financial product provided by the wrap account provider.

In exercising this authority, the adviser has discretion over investment decisions and manages the client’s money or other property. This activity is not limited to arranging for another person to provide a designated service.

Although the adviser may have previously made arrangements for the client to receive the wrap account (an item 54 designated service), the investment management service described in this scenario is a separate activity. That activity is not the same service as arranging for the wrap account provider to provide the wrap account.

Because the adviser manages the client’s money or other property to assist the client in executing transactions, the adviser is providing an item 3 designated service in this scenario.

As the adviser is providing a designated service other than item 54, the item 54 exemptions do not apply.

Other types of designated services

To learn more about whether you provide any other designated services, refer to Who and what we regulate.

Reforms guidance

This guidance sets out how we interpret certain Australian legislation, along with associated Rules and regulations. Australian courts are ultimately responsible for interpreting these laws and determining if any provisions of these laws are contravened.

The examples and scenarios in this guidance are meant to help explain our interpretation of these laws. They’re not exhaustive or meant to cover every possible scenario.

This guidance provides general information and isn't a substitute for legal advice. This guidance avoids legal language wherever possible and it might include generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.

Last updated:
12 Jun 2026

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