diff --git a/pkg/cloudprovider/suite_test.go b/pkg/cloudprovider/suite_test.go
index 6f1e2e0bc986..df3c09fc4259 100644
--- a/pkg/cloudprovider/suite_test.go
+++ b/pkg/cloudprovider/suite_test.go
@@ -250,6 +250,8 @@ var _ = Describe("Allocation", func() {
 			provider, err := v1alpha1.DeserializeProvider(provisioner.Spec.Provider.Raw)
 			Expect(err).ToNot(HaveOccurred())
 			provider.Context = aws.String("context-1234")
+			provider.SubnetSelector = map[string]string{"*": "*"}
+			provider.SecurityGroupSelector = map[string]string{"*": "*"}
 			provisioner = coretest.Provisioner(coretest.ProvisionerOptions{Provider: provider})
 			provisioner.SetDefaults(ctx)
 			ExpectApplied(ctx, env.Client, provisioner)
diff --git a/pkg/controllers/nodetemplate/suite_test.go b/pkg/controllers/nodetemplate/suite_test.go
index 0c95f31df9cc..717832d3ea62 100644
--- a/pkg/controllers/nodetemplate/suite_test.go
+++ b/pkg/controllers/nodetemplate/suite_test.go
@@ -250,6 +250,18 @@ var _ = Describe("AWSNodeTemplateController", func() {
 		})
 	})
 	Context("Security Groups Status", func() {
+		It("Should expect no errors when security groups are not in the AWSNodeTemplate", func() {
+			// TODO: Remove test for v1beta1, as security groups will be required
+			nodeTemplate.Spec.SecurityGroupSelector = nil
+			ExpectApplied(ctx, env.Client, nodeTemplate)
+			ExpectReconcileSucceeded(ctx, controller, client.ObjectKeyFromObject(nodeTemplate))
+			nodeTemplate = ExpectExists(ctx, env.Client, nodeTemplate)
+			securityGroupsIDs, _ := securityGroupProvider.List(ctx, nodeTemplate)
+			securityGroupsIDInStatus := lo.Map(nodeTemplate.Status.SecurityGroups, func(securitygroup v1alpha1.SecurityGroupStatus, _ int) string {
+				return securitygroup.ID
+			})
+			Expect(securityGroupsIDInStatus).To(Equal(securityGroupsIDs))
+		})
 		It("Should update AWSNodeTemplate status for Security Groups", func() {
 			ExpectApplied(ctx, env.Client, nodeTemplate)
 			ExpectReconcileSucceeded(ctx, controller, client.ObjectKeyFromObject(nodeTemplate))
diff --git a/pkg/fake/ec2api.go b/pkg/fake/ec2api.go
index 7672af867e26..e39b00977be5 100644
--- a/pkg/fake/ec2api.go
+++ b/pkg/fake/ec2api.go
@@ -391,7 +391,9 @@ func (e *EC2API) DescribeSubnetsWithContext(ctx context.Context, input *ec2.Desc
 			},
 		},
 	}
-
+	if len(input.Filters) == 0 {
+		return nil, fmt.Errorf("InvalidParameterValue: The filter 'null' is invalid")
+	}
 	return &ec2.DescribeSubnetsOutput{Subnets: FilterDescribeSubnets(subnets, input.Filters)}, nil
 }
 
@@ -429,6 +431,9 @@ func (e *EC2API) DescribeSecurityGroupsWithContext(ctx context.Context, input *e
 			},
 		},
 	}
+	if len(input.Filters) == 0 {
+		return nil, fmt.Errorf("InvalidParameterValue: The filter 'null' is invalid")
+	}
 	return &ec2.DescribeSecurityGroupsOutput{SecurityGroups: FilterDescribeSecurtyGroups(sgs, input.Filters)}, nil
 }
 
diff --git a/pkg/providers/securitygroup/securitygroup.go b/pkg/providers/securitygroup/securitygroup.go
index c5ac9b0929dc..f70b1769a381 100644
--- a/pkg/providers/securitygroup/securitygroup.go
+++ b/pkg/providers/securitygroup/securitygroup.go
@@ -46,7 +46,7 @@ func NewProvider(ec2api ec2iface.EC2API) *Provider {
 	return &Provider{
 		ec2api: ec2api,
 		cm:     pretty.NewChangeMonitor(),
-		// TODO: Remove cahce for v1bata1, utlize resolved security groups from the AWSNodeTemplate.status
+		// TODO: Remove cache for v1beta1, utilize resolved security groups from the AWSNodeTemplate.status
 		cache: cache.New(awscache.DefaultTTL, awscache.DefaultCleanupInterval),
 	}
 }
@@ -55,7 +55,13 @@ func (p *Provider) List(ctx context.Context, nodeTemplate *v1alpha1.AWSNodeTempl
 	p.Lock()
 	defer p.Unlock()
 	// Get SecurityGroups
-	securityGroups, err := p.getSecurityGroups(ctx, p.getFilters(nodeTemplate))
+	// TODO: When removing custom launchTemplates for v1beta1, security groups will be required.
+	// The check will not be necessary
+	filters := p.getFilters(nodeTemplate)
+	if len(filters) == 0 {
+		return []string{}, nil
+	}
+	securityGroups, err := p.getSecurityGroups(ctx, filters)
 	if err != nil {
 		return nil, err
 	}
diff --git a/pkg/providers/subnet/subnet.go b/pkg/providers/subnet/subnet.go
index 58aba3580f91..2226dd611c10 100644
--- a/pkg/providers/subnet/subnet.go
+++ b/pkg/providers/subnet/subnet.go
@@ -61,6 +61,9 @@ func (p *Provider) List(ctx context.Context, nodeTemplate *v1alpha1.AWSNodeTempl
 	p.Lock()
 	defer p.Unlock()
 	filters := getFilters(nodeTemplate)
+	if len(filters) == 0 {
+		return []*ec2.Subnet{}, nil
+	}
 	hash, err := hashstructure.Hash(filters, hashstructure.FormatV2, &hashstructure.HashOptions{SlicesAsSets: true})
 	if err != nil {
 		return nil, err
diff --git a/pkg/test/awsnodetemplate.go b/pkg/test/awsnodetemplate.go
index 34819bad1114..1edaf989ec1d 100644
--- a/pkg/test/awsnodetemplate.go
+++ b/pkg/test/awsnodetemplate.go
@@ -22,6 +22,11 @@ import (
 func AWSNodeTemplate(overrides ...v1alpha1.AWSNodeTemplateSpec) *v1alpha1.AWSNodeTemplate {
 	return &v1alpha1.AWSNodeTemplate{
 		ObjectMeta: test.ObjectMeta(),
-		Spec:       test.MustMerge(v1alpha1.AWSNodeTemplateSpec{}, overrides...),
+		Spec: test.MustMerge(v1alpha1.AWSNodeTemplateSpec{
+			AWS: v1alpha1.AWS{
+				SubnetSelector:        map[string]string{"*": "*"},
+				SecurityGroupSelector: map[string]string{"*": "*"},
+			},
+		}, overrides...),
 	}
 }