AML/CTF reforms on the horizon: what solicitors need to know for their practice

These are some of the questions that will be discussed in a special panel covering the AML/CTF reforms in the commercial litigation stream of the Specialist Accreditation Conference 2025.

The new AML/CTF reforms expand the regime to professions that provide ‘higher risk services.’ Among other things, the reforms aim to improve the effectiveness of the regime to make it easier for businesses to comply with their obligations. It is also hoped the reforms will ‘modernise’ the regime to better reflect different business structures, technologies and illegal financing methodologies.

Lawyers, among other professions, will be affected by tranche two of the reforms which will come into effect as of 1 July 2026.

Dr Mathew Leighton-Daly, legal consultant and academic will be joining the panel to discuss the AML/CTF reforms, what practitioners need to know, and how to prepare for the changes.

Leighton-Daly started his career as a police prosecutor in NSW, before joining ASIC as a regulatory lawyer, dealing with a range of fraud and financial crimes. His career story helps explain how he came to acquire the expertise relevant to this topic.

Leighton-Daly says he always wanted to be a lawyer. Growing up in regional New South Wales, his father was a school principal, and the family frequently moved. One of his father’s friends was a police prosecutor and told him that a good way to get on his feet was to pursue a career as a prosecutor. “[W]hen I finished my HSC, instead of taking the traditional path of going straight to law school, I joined the NSW Police.

“I was on my feet as a prosecutor by about 21 years of age. … most prosecutors are at least studying law… it is internal training, so you [are] on your feet just getting bashed over the head by the magistrate every time you make a mistake,” he says.

From this early exposure, he developed an interest in fraud and financial crime. “I enjoyed the complexity of fraud prosecutions, and I actually won an award as a 22-year-old prosecutor … for running a fraud case on behalf of the NSW police,” he shares.

Leighton-Daly admits that he has always wanted to go to the Bar and read under eminent silk Dominique Hogan-Doran and Justice Michael Lee. As a junior, he volunteered to take on as much work as he could and he ended up working on a lot of tax and financial crime matters.

However, difficulties with his health forced him to take a step back from his busy practice and brought his career as a traditional barrister to an end. These days, Leighton-Daly is an academic at Sydney University and has a sole practice providing legal services in mainly AML, tax and structuring.

He says where there is financial crime, there’s always some form of tax non-compliance. “I’d say evasion is very common and when you say tax is niche, I agree with you. But it does have a significant overlap with AML. …

“[O]ccasionally I see these schemes where as part of the money laundering … they’re putting money into a business and then they’re paying tax on it to try and legitimise the money,” he says.

With the tranche two reforms, Leighton-Daly explains the main provisions affecting lawyers will be whether a lawyer or law practice is a designated service and how firms can manage the risks. “So, is the lawyer or the law practice going to be providing designated services? … litigation isn’t a designated service under the tranche two reforms. … [W]hen litigators are engaging in settlement discussions particularly early on … I think [they] are going to be designated services. I think they will be caught by tranche two,” he says.

Leighton-Daly explains that risk management for law firms will be another important area as there will be significant reporting obligations. “[I] think there’s always going to be a little bit of tension there. …[L]awyers are officers of the court, lawyers are regulated by the Uniform Law and … by the Supreme Court.

“The inherent jurisdiction of the Supeme Court is such that lawyers can be and are disciplined. Now, lawyers are also going to be governed or regulated by an emanation of the executive so there’s a bit of a separation of powers tension there …,” he says.

Leighton-Daly points out that the reporting requirements may be onerous particularly for small practices and predicts there may be “more controversy around designated services … [than] anticipated.”

He believes the panel discussion at the upcoming Specialist Accreditation Conference will be relevant to lawyers because “[f]irstly, they’re going to be under a positive obligation if they’re providing designated services, to have an AML program and to manage AML risk.

“[T]hat’s a positive obligation … regulated by civil penalties. … even if a civil penalty is breached by a lawyer, that’s a big deal … it’s relevant to whether they’re a fit and proper person to hold a practising certificate … there’s also potential criminal liability,” he explains.

The panel will be discussing the practical aspects of tranche two reforms including what are designated services, whether practitioners fall or can be caught within the scope of designated services and privilege.

Leighton-Daly will be joined by leading expert in AML/CTF law and Public Service Medal recipient Sonja Marsic, partner at Norton Rose Fulbright Australia and legal compliance expert Amy Bell, CEO of Teal Compliance and AML Sorted. The panel will be moderated by Bobbie Wan, head of regulatory policy and strategy at the Law Society of NSW.

The Specialist Accreditation Conference 2025 will be held in person on 28 August and online on 29 August. For program details and to register, please visit the website.

The Law Society has a suite of complimentary AML/CTF courses available for practitioners. The latest course, “Preparing your practice for Australia’s anti-money laundering and counter-terrorism financing regime,” is available on demand. Visit the LawInform website for more details.