On Nov. 16, AST AUSTRAC proposed amendments to AML/CFT rules.

  • AST AUSTRAC published draft Anti-money laundering and counter-terrorism financing rules amendment (chapter 21 amendments) instrument 2023, which includes a clarification re domestic financial market operator Australian Securities Exchange Ltd.
  • It clarifies that this firm (ASEL) is not a prescribed financial market under ASTCA, but rather, has been specified as an exempt financial market by the CEO of AST AUSTRAC.
  • In addition, AST AUSTRAC published a draft explanatory statement regarding same.
  • Follows AST GVT Jun. 2021 issued amendments to AML CFT rules 2007, see #111550.
  • Context
  • AST AUSTRAC said AML/CFT Act allows Anti-money laundering and counter-terrorism financing rules instrument 2007 (no. 1) (AML/CFT rules) to specify circumstances in which the AML/CFT Act does not apply to the provision of a designated service.
  • It said chapter 21 of AML/CFT rules currently provides exemptions from the AML/CFT Act for the issuing or selling of securities or derivatives in certain circumstances.
  • Includes the issuing/selling of securities/derivatives on certain financial markets where there is no reasonable way for the issuer/seller to know the identity of the buyer.
  • In 2012, as a result of public consultation on an amendment of chapter 21 to include certain foreign financial markets, AST AUSTRAC was asked to clarify its position.
  • Specifically its position on if the existing chapter 21 exemption for prescribed financial markets applied to the Sydney Futures Exchange Ltd (which is now known as ASEL).
  • In response, AST AUSTRAC considered risk associated with including ASEL in chapter 21 exemption, and whether rationale for exempting prescribed and foreign financial markets applied similarly to ASEL; as a result, ASEL was included in the definition.
  • Namely definition of prescribed financial market for purposes of ch21 of AML/CTF rules.
  • Proposal
  • AST AUSTRAC said the draft instrument makes amendments to the AML/CFT rules.
  • In addition to the proposed clarification mentioned above, draft amends para 21.4(8).
  • It amends this paragraph 21.4(8) in order to extend the exemption to apply to market participants of financial market operator FEX Global Pty Ltd in the same way as ASEL.
  • Office of Best Practice and Regulation advised that Regulatory Impact Statement is not required as amendments are unlikely to have a more than minor regulatory impact.
  • AST AUSTRAC encourages feedback on the draft instrument and explanatory statement from financial service providers as well as other interested stakeholders.
  • Effectiveness
  • The comment period for this consultation closes at midnight (AEST) on Dec. 13, 2023.

Regulators AST AUSTRAC
Entity Types B/D; Corp; Exch
Reference CP, Info 11/16/2023; Citation: ASTCA; AML/CFT Act; Anti-money laundering and counter-terrorism financing rules instrument 2007 (no. 1);
Functions AML; Compliance; Legal; Risk
Countries Australia; Cross-Border
Category AML FIU
Products Derivatives; Issuance/IPO; Securities
Regions AP
Rule Type Proposed
Rule Date 11/16/2023
Effective Date 12/13/2023
Rule Id 191469
Linked to Rule :111550
Reg. Last Update 11/16/2023
Report Section AML & Enforcement

Last substantive update on 11/17/2023