Temporary reprieve eases compliance uncertainty for affected entities
The Financial Markets Authority (FMA) has announced temporary “no action” relief for entities affected by the government’s planned climate-reporting reforms, meaning those expecting their obligations to cease once new legislation passes will not be required to lodge climate statements in the interim.
Liam Mason (pictured), the FMA’s executive director of evaluation and oversight, said the decision recognises uncertainty around the timing of the legislative process.
“We recognise that many entities preparing for upcoming climate reporting periods will be impacted by the uncertain timeframe in which the amending legislation might be passed, meaning they do not know whether they will be required to lodge climate statements or not,” Mason said in a media release.
“This approach will avoid unnecessary compliance costs and promote the development of fair, efficient, and transparent financial markets in the context of pending legislative change that is unlikely to be in place before affected entities are due to lodge upcoming climate statements.”
The relief means FMA will not pursue enforcement for failures to prepare or lodge climate statements under Part 7A of the Financial Markets Conduct Act (FMC Act) for affected climate reporting entities (CREs) in the 2025/26 reporting period.
Key details of the ‘no action’ approach
- Relief takes effect on Nov. 1, 2025
- CREs with June 30, 2025, balance dates must still lodge by Oct. 31, 2025, as reporting was already underway before the government’s Oct. 22 announcement
- From November 2025, the FMA will not take action against affected entities under Part 7A for the 2025/26 period
A “no action” approach signals FMA’s intent not to enforce specific provisions but does not prevent third parties from taking legal action. Entities do not need to apply for or notify the FMA to rely on this relief.
“We will continue to monitor the progress of the amending legislation,” Mason said. “If changes are not made by the time affected CREs are due to begin preparing statements for the 2026/2027 reporting period, we will revisit this ‘no action’ approach.”
Government to lift climate-reporting thresholds
The Financial Markets Conduct Amendment Bill, expected to take effect in 2026, will significantly raise reporting thresholds:
- Listed issuer thresholds will increase from $60 million to $1 billion in market capitalisation or total debt value
- Managed investment scheme (MIS) managers will be removed from the mandatory climate-reporting regime
The Finance and Expenditure Select Committee is scheduled to report back by Jan. 30, 2026
Voluntary reporting still encouraged
FMA noted some affected CREs may continue to publish climate statements voluntarily after thresholds change.
“We recognise that some affected CREs may choose to continue to produce climate statements on a voluntary basis after the amending legislation is enacted,” Mason said.
The fair dealing provisions (Part 2, FMC Act) will continue to apply to representations made in voluntary reports.
What it means for brokers and financial institutions
For brokers, advisers, and institutional clients, FMA’s decision provides short-term compliance certainty while reforms progress. The move reduces costs and administrative pressure for entities likely to exit the regime, while maintaining transparency obligations through fair-dealing rules.
Advisers should monitor legislative milestones ahead of the 2026 transition and be prepared to resume reporting in 2026/27 if the law’s passage is delayed and the FMA’s relief expires.
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