Afterpay boost after the ASIC report lifts the regulatory cloud

"ASIC confirmed its recommendation to regulate Afterpay and other industry players through product intervention powers if Parliament extended them to capture buy now, paying later," said Afterpay in a statement to the ASX Wednesday.

"We believe that the proposed powers of intervention represent a proportionate regulatory response that recognizes Afterpay's unique business model and allows us to continue serving our millions of customers," said the company's executive chairman, Anthony Eisen, investors at the annual meeting of the company held Wednesday.

ASIC Commissioner Danielle Press said the exponential growth of buying today, paying the industry later, as well as the risks identified by the review "means that this will remain an area of ​​concentration for ASIC ".

"We have found that buying now, paying later can cause some consumers to become financially over-committed and likely to pay late fees," said Press.

The stock jumped 10% to a record high of $ 14.29, but lost most of those gains after noon, as the company announced strong activity before Christmas in anticipation of its annual meeting of shareholders in Melbourne , Wednesday.

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The morning stock peak was the first stock transaction higher than US $ 14 since last month, when the announcement of a Senate inquiry into areas of the financial sector that have escaped the control of the royal commission. Hayne caused a fall of more than 19% in Afterpay shares.

The survey concerns payday lenders, debt management companies and buys now, pays later companies like Afterpay.

"We continue to be informed that the committee is focusing primarily on surveys of payday lenders and other high-interest products that are perceived as prey for low-income vulnerable people," said Eisen.

The annual general meeting of the company gave an uncomfortable note to Afterpay's board when 20% of the investors' votes were against the compensation report.

Eisen said the company would respond to investors' concerns about its short- and long-term incentive systems.

"We have heard investors say loud and clear that what they would like to see happen are best practices and principles about (incentive systems)," he said.