ASIC grants class no-action position to second party opinion providers


Key points

  • Financial product issuers are increasingly seeking independent second party opinions (SPOs) on the alignment of their financing instrument, program, or framework with industry-accepted, sustainability-based principles.
  • While the regulatory landscape is evolving, ASIC has issued a two-year class no-action position in relation to the requirement for SPO providers to hold an Australian financial services (AFS) licence where the SPO is given in connection with an offer of financial products.
  • The no-action position relates to offers to wholesale clients only, where certain other conditions are met.

ASIC has issued a class no-action position in response to approaches by industry participants about whether second party opinion (SPO) providers may be providing financial product advice that requires them to hold an Australian financial services (AFS) licence. This no-action position has been issued in relation to offers made only to wholesale clients for the following reasons:

  • It supports market integrity in sustainable finance through facilitating practices to verify claims that an investment has green credentials.
  • With the conditions imposed, the identified regulatory benefits outweigh the regulatory detriment.
  • It is consistent with ASIC’s 2023-2027 Corporate Plan to ensure Australia’s approach to sustainable finance practices reflect global best practice.

No-action position

ASIC does not intend to take action for a contravention of the requirement to hold an AFS license in section 911A(1) Corporations Act 2001 in relation to providing an SPO in connection with an offer to wholesale clients that involves the provision of financial product advice.

The no-action letter does not prevent third parties from taking legal action in relation to that conduct.

Download the letter (PDF 105 KB)

The class no-action will apply until the end of 15 June 2026 unless revoked or modified. Please see Regulatory Guide 108 No-action letters for more details.

Conditions applying to ASIC’s class no-action position: Wholesale clients and managing conflicts of interest and independence of SPO providers

The class no-action position sets minimum regulatory expectations for SPO providers. These include:

  • the SPO is made available in connection with an offer that is only made available to wholesale clients,
  • there are adequate conflict management arrangements in place,
  • the SPO is accompanied by certain disclosures, and
  • the SPO is independent of the commissioning party.

Regulatory Guide 181 Licensing: Managing conflicts of interest sets out ASIC’s guidance on managing conflicts of interest, reflecting ASIC’s expectations for meeting the condition that a SPO provider must have in place adequate mechanisms for avoiding and managing actual and potential conflicts of interest that may arise in relation to the preparation, publication, and distribution of SPOs.

Regulatory Guide 112 Independence of experts sets out ASIC’s guidance on Independence of experts reflecting ASIC’s expectations for meeting certain conditions of this no-action position. For example, a SPO that is tailored to support the views of the commissioning party or any other interested party may not be a genuine second-party opinion.

ASIC is Australia’s corporate, markets and financial services regulator.

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