This article explains two important AML onboarding behaviours within the ChangeGPS Engage module.
Firstly, when onboarding a pre-commencement client, Engage deliberately bypasses Customer Due Diligence (CDD) processes. Secondly, for clients receiving an AUSTRAC-designated service, all Ultimate Beneficial Owners (UBOs) must be entered during Step 3 (KYB) of the onboarding process. If any UBOs are omitted, Know Your Customer (KYC) verification will not be completed for the associated company, trust, or self-managed super fund (SMSF).
Understanding these behaviors can help prevent one of the most common onboarding issues: an entity appearing to be successfully onboarded without having completed the required identity verification.
Key terms used in this article
AML: Anti-Money Laundering. The compliance obligations Engage helps your firm meet.
AUSTRAC: the Australian Transaction Reports and Analysis Centre, Australia's AML/CTF regulator.
Designated service: A service listed in AUSTRAC's Table 6 that triggers AML/CTF obligations for your firm under the Tranche 2 reforms.
Pre-commencement client: A client to whom your firm provided a designated service before the AML/CTF obligations commenced (before 1 July 2026). These relationships are grandfathered to ongoing monitoring.
KYB; Know Your Business. Verification of an organisation (company, trust, or SMSF) via ABN, ASIC, and beneficial ownership checks.
KYC: Know Your Customer. Identity verification of a natural person (an individual).
CDD: Customer Due Diligence. The risk assessment performed on a client. ECDD is Enhanced Customer Due Diligence, required for designated services.
UBO: Ultimate Beneficial Owner. Any individual who ultimately owns or controls 25% or more of an entity.
Before you begin
Before onboarding a client in Engage, make sure you have:
Confirmed whether the client relationship is pre-commencement (a designated service was provided before 1 July 2026) or a new designated service.
The details of the entity being onboarded (company, trust, or SMSF), including its ABN.
The identity details of every Ultimate Beneficial Owner (UBO) that is each individual who owns or controls 25% or more of the entity. For trusts and SMSFs this includes trustees, appointors, and beneficial owners in Step 3 (KYB).
How Engage treats a pre-commencement client
When a client is marked as pre-commencement in Engage, the system bypasses Customer Due Diligence (CDD). This is expected behavior and does not indicate an issue with the onboarding process.
This occurs because pre-commencement relationships are considered grandfathered under the AML/CTF Tranche 2 framework. Where your firm was already providing the designated service before 1 July 2026, full onboarding due diligence is not required. Instead, the client relationship is transitioned into ongoing monitoring, with CDD requirements intentionally omitted during onboarding.
What this means in practice:
You will not be prompted to complete the Risk Assessment (CDD) at Step 4 for a pre-commencement client.
The client is still recorded in Engage and remains subject to ongoing monitoring for future designated services or changes.
If you expected to complete the CDD and that steps did not appear, check whether the client has been flagged as pre-commencement. If the relationship is in fact a new designated service, remove the pre-commencement flag so the full onboarding steps appear.
How Engage treats an AUSTRAC designated service client
When you onboard a client that receives an AUSTRAC designated service, Engage requires Enhanced Customer Due Diligence (ECDD), which includes identity verification of the entity's beneficial owners. Because a company, trust, or SMSF is not itself a natural person, Engage performs Know Your Customer (KYC) verification against the individuals you identify as Ultimate Beneficial Owners (UBOs).
This is the critical point: you must enter all of the UBOs at Step 3. If you do not enter the UBOs, Engage has no individuals to verify, and the KYC verification for the company, trust, or SMSF is not performed.
Step-by-step: onboarding a designated-service client correctly
Open the client in Engage and go to Step 1: Client and Services.
Select the designated service the client receives. Engage displays the AUSTRAC Designated Services banner confirming that Enhanced CDD applies.
Add the entity being onboarded (the company, trust, or SMSF).
Proceed to Step 2: Services. Select the required Designated Services.
Continue to Step 3: Business Verification (KYB) and Step 4: Risk Assessment (CDD) to complete Enhanced CDD.
Tips and best practices
Identify UBOs using the 25% ownership or control threshold. For discretionary trusts and SMSFs, this includes trustees, appointors, and beneficial owners, not just named shareholders.
Check the AUSTRAC Designated Services banner on Step 1. If it appears, Enhanced CDD applies and UBO entry is mandatory.
Confirm the pre-commencement status of every client. Marking a genuinely new designated service as pre-commencement will incorrectly skip CDD.
Common issues
The KYC for my company, trust, or SMSF was not performed.
This almost always happens because no Ultimate Beneficial Owners (UBOs) were entered at Step 1. Engage verifies the individuals behind the entity, not the entity itself, so with no UBOs there is nothing to verify. Return to Step 1, add all UBOs at the 25% threshold, and re-run identity verification at Step 2.
CDD steps did not appear for my client.
If Risk Assessment (CDD) in Step 4 do not appear, the client is most likely marked as a pre-commencement client. In this scenario, Engage intentionally skips the CDD steps. If the client is actually establishing a new designated-service relationship, remove the pre-commencement flag and the missing steps will become available