diff --git a/server/src/com/cloud/configuration/ConfigurationManagerImpl.java b/server/src/com/cloud/configuration/ConfigurationManagerImpl.java
index c15dfa3dcaf..085ed7bc676 100755
--- a/server/src/com/cloud/configuration/ConfigurationManagerImpl.java
+++ b/server/src/com/cloud/configuration/ConfigurationManagerImpl.java
@@ -107,7 +107,6 @@ import com.cloud.network.NetworkVO;
 import com.cloud.network.Networks.BroadcastDomainType;
 import com.cloud.network.Networks.TrafficType;
 import com.cloud.network.PhysicalNetwork;
-import com.cloud.network.PhysicalNetworkServiceProvider;
 import com.cloud.network.PhysicalNetworkVO;
 import com.cloud.network.dao.IPAddressDao;
 import com.cloud.network.dao.NetworkDao;
@@ -1385,7 +1384,10 @@ public class ConfigurationManagerImpl implements ConfigurationManager, Configura
             long physicalNetworkId = createDefaultPhysicalNetwork(zone, domainId);
             
             //add VirtualRouter as the defualt network service provider 
-            PhysicalNetworkServiceProvider nsp = _networkMgr.addDefaultVirtualRouterToPhysicalNetwork(physicalNetworkId);
+            _networkMgr.addDefaultVirtualRouterToPhysicalNetwork(physicalNetworkId);
+            
+            //add security group provider to the physical network
+            _networkMgr.addDefaultSecurityGroupProviderToPhysicalNetwork(physicalNetworkId);            
             
             // Create deafult networks
             createDefaultNetworks(zone.getId(), isSecurityGroupEnabled, physicalNetworkId);
diff --git a/server/src/com/cloud/network/NetworkManager.java b/server/src/com/cloud/network/NetworkManager.java
index d8eba6d5fc8..3015fc158a2 100644
--- a/server/src/com/cloud/network/NetworkManager.java
+++ b/server/src/com/cloud/network/NetworkManager.java
@@ -250,4 +250,7 @@ public interface NetworkManager extends NetworkService {
 	boolean isProviderForNetwork(Provider provider, long networkId);
 
 	void canProviderSupportServices(Map<Provider, Set<Service>> providersMap);
+
+	PhysicalNetworkServiceProvider addDefaultSecurityGroupProviderToPhysicalNetwork(
+			long physicalNetworkId);
 }
diff --git a/server/src/com/cloud/network/NetworkManagerImpl.java b/server/src/com/cloud/network/NetworkManagerImpl.java
index 8ae370fb9c9..d60e16f88c3 100755
--- a/server/src/com/cloud/network/NetworkManagerImpl.java
+++ b/server/src/com/cloud/network/NetworkManagerImpl.java
@@ -4991,6 +4991,13 @@ public class NetworkManagerImpl implements NetworkManager, NetworkService, Manag
         return nsp;
     }
 
+    @Override
+    public PhysicalNetworkServiceProvider addDefaultSecurityGroupProviderToPhysicalNetwork(long physicalNetworkId) {
+
+        PhysicalNetworkServiceProvider nsp = addProviderToPhysicalNetwork(physicalNetworkId, Network.Provider.SecurityGroupProvider.getName(), null, null);
+     
+        return nsp;
+    }
 
     @Override
     public boolean isNetworkSystem(Network network) {