AML/CTF Tranche 2

AML/CFT Tranche 2

This document contains six HelpScout knowledge base articles covering the AML/CTF Tranche 2 changes effective 1 July 2026. Each article is formatted ready to copy into HelpScout. Placeholder links marked [LINK TO BE ADDED] should be updated once articles are published.

Articles in this document:

●        Article 1: What is AML/CTF Tranche 2 and does it affect me?

●        Article 2: Which Smarter SMSF documents require verification?

●        Article 3: Reliance Membership — how it works (Pathway A)

●        Article 4: Full CDD via VerifiMe — how it works (Pathway B)

●        Article 5: How VerifiMe identity verification works

●        Article 6: AML/CTF compliance for team subscriptions

Article 1.

What is AML/CTF Tranche 2 and does it affect me?

Audience: All members

From 1 July 2026, Australia's anti-money laundering laws extended to professional services firms — including platforms like Smarter SMSF that facilitate trust and company formations. This is known as Tranche 2 of the AML/CTF reforms.

As a result, Smarter SMSF is now a reporting entity under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). This creates formal obligations for us around verifying the identity of firms and individuals accessing certain services.

Does this affect me?

It depends on what you use Smarter SMSF for. The laws apply specifically to what are called "designated services" — services that create new legal entities or transfer control of existing ones.

Ask yourself: do you use Smarter SMSF to order any of the following?

●        SMSF establishment

●        LRBA (Bare Trust) setup

●        Discretionary or unit trust formation

●        Company incorporation

●        Change of trustee

If yes, there is now a compliance step built into the process. If no — if you primarily use Smarter SMSF for pension documents, investment strategies, deed variations, or nominations — nothing changes for you.

What do I need to do?

There are two pathways depending on whether your firm has its own AUSTRAC-registered AML/CTF program:

●        Pathway A (Reliance Membership) — for firms registered with AUSTRAC as reporting entities. One-time firm verification, then simple per-order attestation.

●        Pathway B (Full CDD via VerifiMe) — for all other members. No firm setup required. Client verification happens automatically when you place an affected order.

Not sure which applies to you? Contact our team →

Article 2.

Which Smarter SMSF documents require verification?

Audience: All members

The AML/CTF laws apply to a specific category of services — called designated services — that involve creating new legal entities or transferring control of existing ones. The vast majority of Smarter SMSF documents are completely unaffected.

Documents that require verification (Designated Services)

Documents with no change (Not Designated Services)

If you are unsure whether a specific document type is affected, contact our compliance team before placing the order.

Article 3.

Reliance Membership — how it works (Pathway A)

Audience: Firms with their own AUSTRAC AML/CTF program

Pathway A is designed for accounting and advisory firms that are already registered with AUSTRAC as reporting entities and maintain their own AML/CTF program. If this is your firm, the Reliance Membership is the most efficient path — it means your clients don't need to complete any identity verification at the point of ordering.

Am I eligible for Pathway A?

You are eligible if your firm:

• ●        Is registered with AUSTRAC as a reporting entity

• ●        Maintains a compliant AML/CTF program (Part A risk assessment + Part B CDD procedures)

• ●        Can demonstrate that your KYC procedures meet the standard required under the AML/CTF Act

If you're unsure whether your firm qualifies, contact your compliance adviser or check your AUSTRAC registration.

Step 1 — One-time firm verification

Before designated services are unlocked, your firm completes a one-time verification through the Compliance Hub in your account:

• ●        KYB (Know Your Business): Your entity is checked against the ASIC register and ABN records, and screened for PEP and sanctions exposure.

• ●        KYC (Know Your Customer): Each director and beneficial owner holding 25% or more completes a VerifiMe digital identity check — 2–5 minutes on any device, using photo ID plus biometric selfie match.

This step is completed once. You will not need to repeat it unless your firm's structure or principals change.

Step 2 — Signing the Reliance Agreement

Once verification is complete, you sign a Reliance Agreement with Smarter SMSF under s.37A of the AML/CTF Act. This is a formal legal agreement confirming that Smarter SMSF can rely on your firm's own compliance and KYC practices for each designated service order.

The agreement is executed electronically via BoxSign and held on your account record.

Step 3 — Per-order attestation

When you place a designated service order, you confirm via a simple attestation that you have completed your own client due diligence in accordance with your AML/CTF program. The document is then released immediately — your client does not need to take any action.

The attestation requires you to confirm three things:

●        KYC Procedures have been completed for all Relevant Persons associated with the order

●        There is no known or suspected money laundering, terrorism financing, or other criminal activity in relation to any Relevant Person

●        The KYC Procedures were not satisfied solely by reliance on a continuing client concession — full Initial CDD has been separately completed for each Relevant Person in connection with the designated       service.

Important — continuing client concession: If your firm applies the continuing client concession under the AML/CTF Rules for an existing client, this does not satisfy the attestation requirement. The concession belongs to your firm, not to Smarter SMSF. Where a concession has been applied, you must confirm that full KYC has been separately completed for that client in connection with this specific designated service order. If you cannot confirm this, contact our compliance team before placing the order — Smarter SMSF will need to complete its own CDD for that client.

Ongoing obligations

Under s.37B of the AML/CTF Act, Smarter SMSF may conduct annual assessments of all Reliance Agreements. We will contact you at least 60 days before any review with details of what's required. In most cases this will be a straightforward written confirmation that your program remains compliant.

How to get started

Log in to your account and navigate to Admin Console → Compliance Hub. The guided setup takes approximately 15 minutes.

Article 4.

Full CDD via VerifiMe — how it works (Pathway B)

Audience: All members without their own AUSTRAC AML program

Pathway B is the default pathway for most Smarter SMSF members — bookkeepers, sole practitioners, mortgage brokers, SMSF trustees, and any firm that does not have its own AUSTRAC-registered AML/CTF program.

There is no firm-level setup required. No Compliance Hub onboarding, no Reliance Agreement, and no separate registration step for your firm.

How it works — step by step

●        You place the order as normal and enter your client's name and email address.

●        Your client receives a secure VerifiMe invite by email.

●        They complete a 2–5 minute digital identity check on their phone or computer — photo ID plus biometric selfie match.

●        Once confirmed at LOW or MEDIUM risk, the document is released automatically to your account.

What happens if my client is flagged HIGH risk?

If a client returns a HIGH risk result, the order is placed on hold and our compliance team is notified. We will contact you directly with next steps. In most cases this involves a request for additional information rather than an outright decline.

Repeat clients — no re-verification

Once a client has been successfully verified, their record is cached against your account for 12 months. For any subsequent designated service order within that period:

●        No new VerifiMe invite is sent

●        No additional verification fee applies

●        The document releases immediately

After 12 months, re-verification is required. Your client will receive a new VerifiMe invite at that point.

What does my client see?

Your client receives a branded email from Smarter SMSF inviting them to complete a short identity check. The email explains why verification is required and what to expect. The proc Audience: All members

VerifiMe is Smarter SMSF's identity verification partner, purpose-built for AUSTRAC Tranche 2 compliance in the Australian professional services sector. VerifiMe is used in both pathways — for KYC of firm principals under Pathway A, and for client verification under Pathway B.ess takes 2–5 minutes and can be completed on a phone, tablet, or computer.

Smarter SMSF never sees or stores your client's raw identity documents. We receive only a verified attestation — a pass/fail result with a risk rating.

Article 5.

Audience: All members

VerifiMe is Smarter SMSF's identity verification partner, purpose-built for AUSTRAC Tranche 2 compliance in the Australian professional services sector. VerifiMe is used in both pathways — for KYC of firm principals under Pathway A, and for client verification under Pathway B.members

What does VerifiMe check?

How long does it take?

The verification process takes 2–5 minutes for most individuals. It can be completed on any smartphone, tablet, or computer with a camera. No app download is required.

What does Smarter SMSF receive?

Smarter SMSF receives a verified attestation only — a pass/fail result with a risk rating (LOW, MEDIUM, or HIGH). We do not receive, view, or store your client's raw identity documents. All identity data remains within the VerifiMe platform, secured under AES-256 encryption with Australian data sovereignty guaranteed.

Reusable verified identity

VerifiMe gives each verified individual a reusable identity wallet. If your client has already been verified by another Tranche 2 professional using VerifiMe, they can share their existing verified credentials with a simple two-click consent process — no repeat verification and no new fee.

Risk ratings

Privacy and data handling

VerifiMe operates under Australian Privacy Law and the Privacy Act 1988 (Cth). Your client's identity data is used solely for the purpose of completing the required identity check and is not shared with third parties for commercial purposes.

Article 6.

AML/CTF compliance for team subscriptions

Audience: Account owners and team members on team plans

If your Smarter SMSF subscription includes multiple team members, AML/CTF compliance is managed at the firm level — not at the individual user level. This means the account owner completes the compliance setup once, and all team members benefit from it automatically.

Account owner responsibilities

The account owner is responsible for:

●        Determining which pathway applies to your firm (Pathway A — Reliance Membership, or Pathway B — Full CDD via VerifiMe)

●        Completing firm verification if on Pathway A (KYB + KYC for principals)

●        Signing the Reliance Agreement if on Pathway A

●        Ensuring the firm's AML/CTF status is kept up to date if principals change

Team member experience

Team members do not need to complete any separate AML/CTF verification. When a team member places a designated service order:

• ●        Pathway A: A per-order attestation is presented to the team member to confirm they have completed client due diligence under the firm's AML/CTF program.

• ●        Pathway B: The client verification flow is triggered automatically — a VerifiMe invite is sent to the client, and the document releases once verification is complete.

How to check your firm's AML/CTF status

Account owners can view the firm's current compliance status at any time by navigating to Admin Console → Compliance Hub.

What if a principal changes?

If a director, beneficial owner, or key signatory on your account changes, you must notify Smarter SMSF. The newprincipal will need to complete a VerifiMe identity check before designated services can continue to be accessed under Pathway A.

To notify us of a change, log a ticket with our compliance team →

PAYG (individual) members

If you are a PAYG member (not on a team plan), the same pathways apply — the distinction is that you are both the account owner and the sole user. Compliance setup is completed under your individual account.

Smarter SMSF is a reporting entity under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). These articles provide general information only and do not constitute legal or compliance advice.