AML/CTF reforms: What you need to know about the new reporting group framework

From 31 March 2026, designated business groups will cease. Entities seeking to discharge certain AML/CTF obligations on a group basis must form a reporting group under the amended Anti Money Laundering and Counter Terrorism Financing Act 2006 (Act) and the Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 (Rules).

While reporting groups may deliver operational efficiencies, the framework imposes eligibility, governance and documentation requirements. If a reporting group is improperly structured, both the lead entity and reporting entity members may be exposed to regulatory risk.

Formation of a reporting group

A reporting group may be formed either:

• on the basis of a control relationship (a business group); or
• by election through written agreement among members (an elective reporting group).

For business groups, a reporting group will only form where a control relationship exists, at least one member provides a designated service, and each member in the control structure agrees in writing on a lead entity. The reporting group membership comprises the persons within the control structure and cannot be formed with only some members.

For elective reporting groups, each member must elect in writing to join the group and agree on a lead entity. Where members of a business group join an elective reporting group, the entire business group must join and leave together.

In both models, members must designate a lead entity and document how obligations will be allocated and discharged across the group. Allocation arrangements must be reflected in group policies and supported by accessible records.

Lead entity of a reporting group

The lead entity must satisfy defined criteria. It must:

• be agreed in writing by members to act as lead entity;
• not be controlled by another member that provides designated services;
• have the capacity to determine the outcome of decisions relating to the AML/CTF policies of other members; and
• be an eligible Australian based entity under the Act and Rules.

The capacity requirement is substantive. The lead entity must have genuine authority over policy settings and oversight. Groups that previously selected a designated business group lead on an administrative basis should reassess eligibility under the reformed criteria.

The Rules address changes in membership and lead entity cessation. A reporting group must not operate without a lead entity for more than 28 days. Where a lead entity ceases, reporting entity members must continue to comply with the most recent lead entity policies until a new lead entity is designated.

Inclusion of non-reporting entities

Under the reforms, reporting groups may include non-reporting entities, and members may discharge certain obligations on behalf of other members in accordance with the Act and Rules.

However, allocation does not transfer regulatory liability. Liability for contraventions remains with the lead entity and the relevant reporting entity members. Each reporting entity remains responsible for ensuring its obligations are met, and the lead entity remains accountable for group wide oversight.

Information sharing within the group

The reporting group framework facilitates the sharing of risk and compliance information between members for risk management and compliance purposes. Group policies should address:

• what information may be shared;
• the purposes of sharing; and
• controls to prevent unauthorised disclosure, including in connection with suspicious matter reporting.

Information sharing must also comply with applicable privacy and confidentiality obligations.

Practical considerations

Entities considering formation or continuation of a reporting group should:

• confirm the control structure and membership, or elective group eligibility;
• assess lead entity eligibility;
• document member agreement and allocation of obligations;
• ensure records are accessible to relevant members; and
• update enrolment details within required timeframes.

Reporting groups do not automatically replace designated business groups. Eligibility and governance requirements must be reassessed.

For further information regarding reporting groups or the AML/CTF reforms, please contact cmee@cnmlegal.com.au or amcaliece@cnmlegal.com.au, or call 07 3211 4010.