Financial Services, Funds and Superannuation legal update - Quarter 3, 2026
12 August 2026
Welcome to the June & July Financial Services legal update, your guide to the key regulatory developments, enforcement actions and emerging legal trends shaping Australia’s financial services landscape.
The start of the new financial year brings along with it the implementation of the new AML/CTF laws and regulations that have been implemented across thousands of businesses in Australia.
We hope you find this edition insightful and if you have any questions, please do not hesitate to contact a member of our team.
Anti-Money Laundering/Counter Terrorism Finance (AML/CTF)
New AML/CTF regime in force from 1 July 2026
The start of the new financial year marks a major milestone in Australia’s AML/CTF laws. Thousands of real estate, conveyancing, legal, and accounting business are now regulated under the new AML/CTF regime, meaning they are responsible for conducting customer due diligence and reporting suspicious matters to combat money laundering and counter terrorism financing risks.
The relevant businesses were required to enrol with AUSTRAC by 29 July 2026 to ensure compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
New reporting regime now in force | AUSTRAC
AUSTRAC releases new resources to help businesses with their AML/CTF obligations
On 14 July 2026, AUSTRAC published additional resources for businesses that have implemented their AML/CTF program but are pending enrolment with AUSTRAC. These resources include webinar recordings for understanding key AML/CTF obligations, money laundering and terrorism financing concepts, and the various components and reporting entities at play for the AML/CTF program.
AUSTRAC’s resource library also includes program starter kits, how-to guides on implementing risk controls and customer due diligence, and maintenance of knowledge of money laundering and terrorism financing risks and AML/CTF policies.
These resources are a snapshot of other documents AUSTRAC has published for helping businesses, all of which can be found below.
Key steps and support for your AML/CTF journey | AUSTRAC
Updates from AUSTRAC’s CEO
In the lead up to 1 July 2026, AUSTRAC’s CEO Brendan Thomas gave various industry updates concerning the new AML/CTF regime, covering:
- AUSTRAC’s achievements in expanding the AML/CTF regime being a major milestone, including the publication of a set of risk assessments and guidelines for reporting entities to understand their obligations and strengthen their risk-based approach. For the remainder of 2026, AUSTRAC aims to cultivate the AML/CTF system by commencing the Financial Action Task Force that will assess the regime’s effectiveness in combatting financial crime. CEO mid-year update | AUSTRAC
- Speech during the Australian Finance Industry Association Risk Summit highlighting the importance of the new regime. Specifically, a 12% increase in suspicious activity reports was identified last financial year, as well as a 20% increase of business reporting by lodging SMRs. Artificial Intelligence was also identified as a risk area in optimising financial crime, but also a tool for AUSTRAC to detect financial crime. CEO Speech - AFIA Risk Summit | AUSTRAC
High-risk jurisdictions subject to a call for action
The Financial Action Task Force (FATF) reaffirmed its list of high-risk jurisdictions that are subject to enhanced due diligence and called upon members and other jurisdictions to adopt countermeasures against Iran and the Democratic People’s Republic of Korea (DPRK).
While acknowledging Myanmar’s recent steps to improve its AML/CTF regime, further reforms are required and enhanced due diligence is still recommended.
High-Risk Jurisdictions subject to a Call for Action - 19 June 2026
Jurisdictions under increased monitoring
The FATF updated its list of jurisdictions under increased monitoring (grey list), adding Bosnia and Herzegovina and Iraq now subject to enhanced monitoring, while reviewing progress made by numerous other jurisdictions and identifying steps required to improve their respective AML/CTF regimes.
Jurisdictions under Increased Monitoring - 19 June 2026
What the Federal Budget’s Digital ID commitment means for how you verify a client
The 2026-27 Federal Budget includes $654.3 million to expand Australia’ Digital ID system, including an allocation to integrate biometric liveness detection.
The announcement will materially change the infrastructure and policy environment as the AML/CTF tranche 2 obligations come into effect and represents a targeted expansion of the Government’s Digital ID System and myID platform. For reporting entities, it represents a shift towards digital identity verification within the due diligence process.
What the federal budget’s Digital ID commitment means for how you verify a client
Reliance under the AML/CTF Act: Before you sign a reliance agreement
The Queensland Law Society published guidance on reliance arrangements under the expanded AML/CTF regime, emphasising that reporting entities remain responsible for satisfying their own customer due diligence obligations. While reliance agreements may improve efficiency, reporting entities should still determine if reliance is appropriate in the context of their AML/CTF program.
Reliance under the AML/CTF Act: Before you sign a reliance agreement – Proctor
Superannuation
APRA finalises targeted amendments to CPS 230 Operational Risk Management
Amendments to CPS 230 came into effect on 1 July 2026. The changes introduce a limited exemption from various contractual requirements in CPS 230 for material arrangements with certain service providers including government agencies, regulators, central banks, financial market exchanges, operators of clearing and settlement facilities, operators of payment systems and schemes as well as financial messaging infrastructure.
APRA finalises targeted amendments to CPS 230 Operational Risk Management | APRA
APRA and ASIC announce FAR changes to reduce administrative burden
ASIC and APRA announced measures to streamline the operation of the Financial Accountability Regime (FAR) and reduce regulatory burden while maintain accountability standards. The proposal would raise key function requirements from the FAR rules, increase the materiality threshold for notifying AFCA and APRA, remove accountability maps and the need for information on accountable persons’ direct reports. ASIC envisages that changes to FAR entity responsible manager competency evidence requirements will streamline the process from October 2026.
APRA and ASIC announce FAR changes to reduce administrative burden | APRA
APRA commences next phase of push to strengthen and streamline governance requirements
APRA commenced the final phase of its governance review across banking, superannuation and insurance, and published an updated draft of Prudential Standard CPS 510 ‘Governance’ for consultation. The draft standard aims to raise expectations on board members and senior persons, and is designed to reflect best practice, establish clear benchmarks and addresses today’s areas of poor practice. The final standard and guidance is set for release in late 2026, with commencement planned for early 2028.
APRA commences next phase of push to strengthen and streamline governance requirements | APRA
APRA and ASIC host Superannuation CEO Roundtables
APRA and ASIC convened joint roundtables with superannuation fund CEOs to discuss insights from APRA’s Systems Risk Stress Test (SRST) and broader system-wide risk, operational resilience and regulatory reform.
The SRST highlighted the increasing scale of the superannuation sector within the financial system. It was emphasised that liquidity pressures could change as the system evolves and demographic shifts unfold, however third party operational resilience was broadly considered notable and it was agreed that third-party providers were potential areas of systemic vulnerability.
APRA and ASIC host Superannuation CEO Roundtables – April 2026 | APRA
General regulatory
Fines and penalties
From 1 July 2026, the value of one penalty unit under s 4AA of the Crimes Act 1914 was increased from $330 to $364.
ASIC requires companies to provide director IDs
From 1 July 2027, companies will be required to provide the IDs of directors to ASIC.
The change is added by amendment to the Corporations Act 2001 (Cth) coming into effect on 1 July 2027. Directors are already required to hold a director identification number, and from 1 July, a director’s ID will need to be recorded on the companies register. The change is aimed at preventing the use of false or fraudulent identities, and to trace directors’ relationships across companies over time.
Director identification numbers (director IDs) | ASIC
Scams Prevention Framework
Effective 1 July 2026, AFCA became the single external dispute resolution scheme for complaints falling within the Scams Prevention Framework (SPF).
The SPF, introduced in 2025 under the Scams Prevention Framework Act 2025, is a world-first legislation aimed at strengthening consumer protections by placing obligations on banks, telecommunication providers and digital platforms to protect consumers from scams. The Australian Financial Complaints Authority (AFCA) has been authorised by the Australian Government to determine external disputes under the SPF, and from 1 September 2026, designated organisations under the SPF need to be AFCA members. The authorisation extends AFCA’s jurisdiction to handle disputes across the banking, telecommunications and digital platform sectors. Consumers and small businesses can bring complaints to AFCA from 31 March 2027.
Scams Prevention Framework | Australian Financial Complaints Authority (AFCA)
Scams Prevention Framework – Protecting Australians from scams | Treasury.gov.au
AFCA to handle external disputes over scam losses | Treasury Ministers
ASIC proposes increase to Net Tangible Assets requirements
ASIC has proposed its approach for the changes to the net tangible asset (NTA) requirements for responsible entities of registered managed investment schemes. The current minimum NTA for a responsible entity is $150,000 or $10 million depending on custody arrangements. ASIC consulted on three options but the responses from the consultation supported the NTA amounts be increased in line with the consumer price index. ASIC has proposed the following approach which will come into effect on 1July 2027:
- minimum financial thresholds in the NTA requirement will be increased to reflect inflation between June 2013 (when they were last updated) and March 2026, and
- annual indexation will be introduced to ensure the thresholds remain current.
ASIC announces changes to net tangible assets requirement for responsible entities | ASIC
ASIC extends no-action position for digital asset businesses to 30 September 2026
ASIC has extended its previous no action position for digital assets businesses from 30 June 2026 to 30 September 2026. The no action position was also extended to operate under an authorised representative arrangement or intermediary arrangement. This gives more applicants time to apply for a licence following the changes to ASIC Info Sheet 255 regarding digital assets and financial products and services. ASIC has only received 30 AFS licence applications.
Digital assets: Financial products and services | ASIC
ASIC combines investor directed portfolio services instruments
ASIC has combined two legislative instruments regarding investor directed portfolio services (IDPS) and IDPS-like schemes with ASIC Corporations (Platforms—IDPSs and IDPS-like Schemes) Instrument 2026/395. This instrument removed and updated requirements, including replacing quarterly reporting with electronic access to account information.
ASIC issues simplified legislative instrument for platform operators | ASIC
Banking and Authorised Deposit Taking Institutions
ASIC release Report 837 Offsets, out of mind: Banks fall short on mortgage offset account promises
ASIC has released Report 837, which assessed mortgage reporting data from eight banks representing more than 70% of the Australian home loan market, between 1 September 2023 and 31 August 2025. The report states that banks paid over $55 million in customer compensation for offset account failures. The key findings of the report included:
- banks could not readily identify when customers had requested an offset account
- banks inconsistently detected where they failed to link offset accounts to home loans
- when banks did identify potential offset account failures they allegedly did not adequately assess the extent of potential customer loss, and
- banks do not have simple means for customers to identify if an account is an offset account.
APRA responds to submissions – remaking level 3 conglomerate standards
APRA commenced its consultation process to remake the three level 3 conglomerate prudential standards on 31 March 2026. APRA’s intent is to remake those standards, prior to the sunset date of 1 October 2026, with certain administrative changes updating references and adding paragraphs concerning interpretation and previous exercise of discretion.
APRA received one submission during consultation, which provided that while the remaking is largely administrative, it also provided an opportunity to reinforce governance, accountability and supervisory clarity.
Response to submissions – Remaking Level 3 conglomerate standards | APRA
APRA grants ADI licence to Revolut
Revolut Payments Australia Pty and Revolut Australia NOHC Pty Ltd, in its capacity as non-operating holding company, were granted licences on 21 July 2026 to operate as authorised-deposit taking institutions.
APRA grants ADI licence to Revolut | APRA
APRA finalisation of FAQ on treatment of deposits placed with settlement service providers
APRA finalised its FAQ clarifying the treatment of deposits held with settlement service providers (SSPs) for the purpose of the Minimum Liquidity Holdings (MLH) requirements under Prudential Standard APS 210 ‘Liquidity’. APRA’s guidance confirms that security deposits provided to facilitate or secure encumbered settlement obligations cannot be recognised as MLH liquid assets. Given the potential business impact for SSPs and ADIs, APRA has extended the transition timeline to satisfy MLH requirements.
Finalisation of FAQ on treatment of deposits placed with settlement service providers | APRA
APRA updates exemptions from section 66 of the Banking Act 1959
APRA has released its response to consultations on minor proposal to instruments concerning s 66 of the Banking Act 1959.
The proposal amends a class exemption that allows foreign entities to use restricted terms when issuing debt securities to wholesale capital markets. The proposal would see the exemption capture a broader set of entities that commonly seek APRA’s consent. The change could result in reduced administrative burden on the relevant entities. Act so that allows foreign entities to use restricted terms when issuing debt securities to wholesale capital markets.
APRA updates exemption from section 66 of the Banking Act 1959 | APRA
