Providers of second party opinions (SPOs) in Australia’s wholesale sustainability finance market have been operating without a settled licensing framework since June 2024, when ASIC first issued a class no-action position on the AFS licence requirement under section 911A(1) of the Corporations Act 2001 rather than rule on the question directly. As of June 16, that position has been extended until the end of June 15, 2028 – the second time ASIC has used this mechanism in place of a permanent answer. The relief covers SPOs that involve general financial product advice to wholesale clients only.
The licensing question arises because SPO work may constitute general financial product advice under the Corporations Act – an activity that ordinarily requires an AFS licence. ASIC noted that market participants had approached it directly to ask whether preparing an SPO triggered that obligation. Rather than rule definitively on the question, ASIC chose to suspend enforcement while it considered the issue further – a position it has now maintained for two years and extended for two more.
For the current extension, ASIC has pointed to two reasons for continuing that approach: the staged implementation of mandatory climate reporting requirements under the Corporations Act, and regulatory changes under way in comparable overseas jurisdictions. Both, the regulator indicated, need to play out further before it can assess their full effect on SPO services and the licensing framework that should govern them.
The no-action position is conditional. SPO providers must satisfy all of the following before the relief applies to their work:
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Those conditions apply to a specific and narrowly defined category of report. Under the no-action letter, an SPO is a report, statement, or opinion on whether a financing instrument, program, or framework aligns with – or contributes to – industry-accepted environmental sustainability principles, prepared by someone independent of the commissioning party. The entity producing the report is the SPO provider. ASIC has noted a rise in demand for these assessments. They are used predominantly in transactions where issuers or borrowers want an outside view on the environmental credentials of their financing arrangements. That function sits close enough to financial product advice under Australian law to create a licensing ambiguity. That ambiguity is what the no-action position is designed to manage.
Nothing in the extension expands the relief to cover retail client offers. An SPO connected to a financial product offer made available to retail clients falls outside the no-action position entirely. The written agreement condition reinforces this boundary: commissioning parties must contractually commit that the report will not be used in a retail context. For practitioners working across both wholesale and retail distribution channels, this is a live compliance consideration – particularly where a financial product may later be on-sold or restructured in ways that bring retail investors into scope.
The extension moves the deadline but does not close the licensing question. ASIC has given no indication of whether a formal framework for SPO providers is under development, nor whether the no-action position will be renewed a third time when it lapses in June 2028. Under Regulatory Guide 108, the regulator retains the right to withdraw or revise the position at any time – a qualifier that applies to the current term just as it did to the original. ASIC has also confirmed that the letter does not prevent third parties, including the Director of Public Prosecutions, from pursuing legal action over the conduct it covers, and that a court is not bound by the regulator’s stated position.
The regulator’s reference to mandatory climate reporting timelines – being phased in under the Corporations Act – suggests it is watching how those obligations reshape demand for SPO services before committing to a permanent position. That process is still under way, which means SPO providers, the firms commissioning their reports, and the professionals connected to wholesale financial product offers are all operating in a framework that remains, by design, temporary. SPO providers and commissioning parties should confirm that existing arrangements meet each condition in the no-action letter and track ASIC communications for any amendments before the June 2028 expiry.
