The financial services industry has embraced a tactic of safety in numbers around new anti-money laundering laws to avoid regulator Austrac targeting individual businesses.
The Investment and Financial Services Association (IFSA) and FPA released uniform standards yesterday for planners and product issuers that outlined recommended procedures to fulfil their legal obligations.
Financial services licensees have less than a month to fall in line with the first tranche of federal anti-money laundering and counter-terrorism financing (AML/CTF) rules around customer identification and record keeping.
Businesses that breach the legislation can be fined $11 million, while individuals within the company face up to a $2.2 million penalty.
Austrac, Australia's anti-money laundering and counter-terrorism financing regulator, has granted a 15-month prosecution free period to businesses provided reasonable steps are taken to comply.
The industry associations lobbied the Federal Government on behalf of members throughout 2006 and conducted awareness and education campaigns this year to get ready for the December 12 deadline.
"This guidance ... will play a critical role in ensuring that the AML/CTF regime is implemented in an effective and competitively neutral manner across the wealth management industry," IFSA chief executive Richard Gilbert said.
In a document seen by InvestorDaily, the FPA admitted teething problems existed but said the industry was working hard to ensure a smooth transition to the regime.
"The implementation of standard and uniform practices across the industry is an effective manner of ensuring that an organisation is not singled out for attention by Austrac," the FPA said.
"In this way a cooperative approach from industry members (resulting in safety in numbers) will be important in moving forward."
In July, the FPA said some businesses were spending large amounts on compliance unnecessarily due to fearmongerers looking to profit from the new laws.
Two new courses on AML/CTF designed for planners will be available from the end of November.
The standards will be reviewed in 2009.
