Do accountants need to complete KYC for existing registered office clients from 1 July 2026?
If an accounting firm was already acting as a company's registered office before 1 July 2026, does it need to complete KYC immediately under AML/CTF Tranche 2? Here is a practical, risk-based view.
This article reflects AUSTRAC guidance current as at 16 June 2026. It is general information only and is not legal advice.
One question that keeps coming up for accounting firms preparing for AML/CTF Tranche 2 is this: if our firm was already acting as a company's registered office before 1 July 2026, do we need to complete KYC immediately from 1 July 2026 if that arrangement simply continues?
It is a fair question. Many accounting firms have acted as the registered office for client companies for years. In some cases this has been part of the firm's ASIC agent work, company secretarial services, tax relationship or broader business advisory relationship.
From 1 July 2026, the AML/CTF regime expands to capture a range of professional services. One of those services is providing a registered office address or principal place of business address for a body corporate or legal arrangement.
That creates an important practical issue: are existing registered office clients treated like brand new designated service clients, or are they treated as pre-commencement customers who transition into the AML/CTF regime?
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The short answer
Where: - the firm was already acting as the registered office before 1 July 2026; - the registered office arrangement simply continues after 1 July 2026; - there are no suspicious circumstances; - there is no significant change in the nature and purpose of the business relationship; and - the client's money laundering, terrorism financing or proliferation financing risk has not become medium or high because of a significant change,
then the better read of AUSTRAC's guidance is that the firm may not automatically be required to complete full initial CDD solely because the registered office arrangement continues unchanged after 1 July 2026.
That said, this should not be treated as a permanent exemption. A better way to think about it is this: the client may transition into the AML/CTF regime as a pre-commencement customer and should then be managed through the firm's ongoing CDD, periodic review and trigger event processes.
This is a practical interpretation of the available guidance. It is not legal advice, and each firm should make its own considered decision based on its AML/CTF program, client relationships and assessment of risk.
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Is providing a registered office address a designated service?
Yes. AUSTRAC lists providing a registered office address or principal place of business address of a body corporate or legal arrangement as a professional designated service. <a href="https://www.austrac.gov.au/new-austrac/designated-services-newly-regulated-entities/professional-designated-services" target="_blank" rel="nofollow noopener noreferrer">Professional designated services (AUSTRAC)</a>
For accounting firms, this means that acting as the registered office for a company can fall within the AML/CTF regime from 1 July 2026.
For new clients, the position is more straightforward. If a client asks the firm to provide a registered office address after the regime starts, the firm should assess whether it is providing a designated service and apply its AML/CTF program accordingly.
The more difficult question is what happens where the registered office arrangement already existed before 1 July 2026.
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What is a pre-commencement customer?
A pre-commencement customer is broadly an existing customer who was already in a business relationship with the firm before the relevant AML/CTF obligations commenced.
For Tranche 2 professional services, this matters because many accounting firms will have long-standing clients who were already receiving services before 1 July 2026.
AUSTRAC's transitioning existing customers guidance indicates that firms can continue providing designated services to pre-commencement customers without immediately completing initial CDD, unless certain circumstances arise. <a href="https://www.austrac.gov.au/industry-and-business/obligations-and-guidance/your-amlctf-program/customer-due-diligence/transitioning-existing-customers" target="_blank" rel="nofollow noopener noreferrer">Transitioning existing customers (AUSTRAC)</a>
If the registered office arrangement was already in place before 1 July 2026 and nothing changes, it may not be appropriate to treat that client in exactly the same way as a brand new client requesting the service for the first time. Instead, the firm should consider whether the client falls within the pre-commencement customer guidance and whether any trigger has occurred that requires initial CDD.
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When would initial CDD be required for an existing registered office client?
AUSTRAC's guidance identifies circumstances where initial CDD must be completed for a pre-commencement customer. The key triggers include:
1. a suspicious matter reporting obligation arises in relation to the customer; or 2. there is a significant change in the nature and purpose of the business relationship, and that change results in the customer's money laundering, terrorism financing or proliferation financing risk becoming medium or high.
This means an existing registered office client should not simply be ignored because the relationship predates 1 July 2026. The firm still needs to monitor the relationship and identify whether anything has changed.
For example, initial CDD may need to be considered where: - the client's ownership or control structure changes; - new directors, shareholders or beneficial owners are introduced; - the client starts operating in a higher-risk industry; - the firm becomes aware of suspicious behaviour or unusual activity; - information comes to light that calls the client's identity, ownership or structure into question; - the client requests a new service that significantly changes the nature or purpose of the business relationship and causes the client's ML/TF risk to become medium or high; - the client becomes connected with a higher-risk jurisdiction, structure or transaction.
The important point is this: the trigger is not simply that the client existed before 1 July 2026. The trigger is whether something has occurred that requires the firm to complete initial CDD under the AML/CTF regime.
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Is the existing registered office arrangement "quarantined"?
We would be careful with that word. It may be tempting to describe existing registered office clients as "quarantined" because the relationship already existed before 1 July 2026. However, that may give the wrong impression.
A pre-commencement customer is not permanently outside the AML/CTF regime. The client still needs to be managed under the firm's AML/CTF program.
A more accurate way to describe the position is: the client may not require immediate initial CDD on day one solely because the existing registered office arrangement continues unchanged, but the client still needs to be monitored, reviewed and managed through ongoing CDD.
That distinction matters. The client is not ignored. The firm simply takes a risk-based approach to when initial CDD is required.
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Ongoing CDD still matters
Even where initial CDD is not completed immediately, ongoing CDD remains important. AUSTRAC's ongoing CDD guidance makes it clear that firms need to monitor customers and manage ML/TF risks over time. <a href="https://www.austrac.gov.au/industry-and-business/obligations-and-guidance/your-amlctf-program/customer-due-diligence/ongoing-customer-due-diligence/overview-ongoing-customer-due-diligence" target="_blank" rel="nofollow noopener noreferrer">Ongoing customer due diligence (AUSTRAC)</a>
For existing registered office clients, this means firms should consider how those clients will be reviewed after 1 July 2026. That may include: - identifying all companies using the firm's address as their registered office; - applying a risk-based triage; - checking whether the relationship has changed; - monitoring for unusual or suspicious activity; - setting periodic review dates; - updating customer information when appropriate; - escalating clients where risk indicators are identified.
In other words, the client may not need full initial KYC immediately on day one, but they should still be brought into the firm's AML/CTF control framework.
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What should accounting firms do in practice?
For existing registered office clients, firms should avoid an informal "do nothing" approach. A more defensible approach would be to work through the following steps.
1. Identify existing registered office clients
Start by identifying which clients use the firm's address as their registered office or principal place of business. This may involve reviewing ASIC agent records, company registers, practice management data and client engagement records.
2. Determine whether the client is a pre-commencement customer
Consider whether the firm was already in a business relationship with the client before 1 July 2026. If the relationship already existed and the registered office arrangement was already in place, the client may fall within the pre-commencement customer guidance.
3. Check whether anything has changed
The firm should consider whether there has been a significant change in the nature and purpose of the relationship. For example: - Has ownership changed? - Have new directors or beneficial owners been introduced? - Has the client's business activity changed? - Has the client started operating in a higher-risk area? - Has the firm been asked to provide a new or expanded service? - Has anything occurred that creates suspicion? - Has the client's risk profile changed?
If nothing has changed and there are no suspicious circumstances, the firm may conclude that immediate initial CDD is not automatically required solely because the registered office service continues.
4. Apply a risk-based triage
Not all registered office clients carry the same risk. A long-standing, local trading company with known directors and a simple ownership structure may be very different from a company with offshore ownership, nominee arrangements, unusual activity or unclear beneficial ownership. Firms should triage existing clients based on risk, rather than treating every client file as identical.
5. Document the firm's position
This is one of the most important practical steps. If the firm decides that immediate initial CDD is not required for a particular existing registered office client, or for a defined group of similar clients, that position should be documented. The record should explain: - the client or client group considered; - why the firm considers the client to be a pre-commencement customer; - whether any relevant trigger has occurred; - the firm's assessment of risk; - the guidance the firm considered; - how the client will be managed through ongoing CDD and periodic review.
This helps show that the firm has made a considered, risk-based decision rather than simply ignoring the issue.
6. Bring the client into ongoing review
Even if full initial CDD is not completed immediately, the client should still be included in the firm's ongoing review process. The firm should set a review approach that is consistent with its AML/CTF program and the client's risk profile. For lower-risk existing clients, this may be a periodic review. For higher-risk clients, or clients where information is unclear, earlier review may be appropriate.
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Practical example 1: unchanged existing registered office client
Assume an accounting firm has acted as the registered office for a small Australian company since 2022. The company has: - the same directors; - the same shareholders; - the same business activity; - the same local operations; - no suspicious activity; - no material change in the relationship with the firm.
The only thing that has changed is that the AML/CTF regime has commenced for professional services from 1 July 2026.
In that scenario, the better read of AUSTRAC's guidance is that the firm may not automatically be required to complete full initial CDD on 1 July 2026 solely because the unchanged registered office arrangement continues. However, the firm should still document its position, risk assess the client at an appropriate level, and include the client in ongoing CDD and periodic review.
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Practical example 2: existing client with a material change
Now assume the same company changes ownership shortly after 1 July 2026. A new offshore beneficial owner is introduced, the business activity changes, and the client asks the firm to assist with a restructure.
That is a different situation. The firm would need to consider whether there has been a significant change in the nature and purpose of the business relationship, whether the client's ML/TF risk has become medium or high, and whether initial CDD is now required.
In that scenario, it would be much harder to rely on the fact that the client was an existing registered office client before 1 July 2026.
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Practical example 3: suspicious activity
Assume an existing registered office client continues unchanged, but the firm becomes aware of unusual behaviour or information that gives rise to suspicion.
In that case, the issue is no longer just whether the client is pre-commencement. The firm would need to consider its suspicious matter reporting obligations and whether initial CDD is required under the pre-commencement customer guidance.
Firms should also be careful about tipping-off risks where suspicion is involved.
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Our practical view
We have not seen AUSTRAC provide a neat, scenario-specific answer that says every existing registered office arrangement must be fully KYC'd immediately on 1 July 2026.
The safer practical view is: existing registered office clients should not be treated as permanently exempt, but they may not automatically require immediate full initial CDD on day one solely because an unchanged registered office arrangement continues after 1 July 2026.
The firm should instead: - determine whether the client is a pre-commencement customer; - assess whether any trigger has occurred; - document its position; - apply ongoing CDD; - review the client in line with its AML/CTF program; - escalate the client if risk indicators emerge.
This is ultimately a risk-based decision for the firm.
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Frequently asked questions
Do accountants need to KYC every existing registered office client on 1 July 2026?
Not necessarily. If the client is a pre-commencement customer, the registered office arrangement already existed before 1 July 2026, and no relevant trigger has occurred, the firm may not automatically need to complete full initial CDD immediately on day one. However, the client should still be managed through ongoing CDD and periodic review.
Is acting as a registered office a designated service under AML/CTF Tranche 2?
Yes. AUSTRAC lists providing a registered office address or principal place of business address of a body corporate or legal arrangement as a professional designated service.
Are existing registered office clients exempt forever?
No. Existing registered office clients should not be treated as permanently exempt. Even where immediate initial CDD is not required, the firm should still monitor and review the client under its AML/CTF program.
What triggers initial CDD for a pre-commencement customer?
The key triggers include a suspicious matter reporting obligation, or a significant change in the nature and purpose of the business relationship that results in the customer's ML/TF risk becoming medium or high.
Does a new service always trigger KYC?
Not automatically. The better question is whether the new service significantly changes the nature and purpose of the business relationship and results in the customer's ML/TF risk becoming medium or high.
Should the firm document its position?
Yes. If the firm decides not to complete immediate initial CDD for an existing registered office client, it should document the reasoning, the risk assessment, the guidance considered and how the client will be managed through ongoing CDD.
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Final note
This article is general information only and should not be treated as legal advice. Each firm should consider its own AML/CTF program, client base, risk profile and professional obligations. Where a client scenario is unclear, complex or higher risk, firms should consider seeking independent advice.
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How Nelvo helps
Nelvo helps Australian accounting firms prepare for and manage their AML/CTF obligations under Tranche 2. That includes: - AML/CTF program setup; - client risk assessment; - KYC and KYB workflows; - policies and procedures; - staff training; - evidence management; - incident reporting; - ongoing compliance review.
For accounting firms, the key is not just completing KYC once. It is building a repeatable, auditable process that supports risk-based decisions over time. That is where Nelvo is designed to help.