ASIC give AfterPay (ASX: APT) and Zip Co (ASX: Z1P) a boost
Stock
AfterPay Touch (ASX: APT) $13.40 as at 28/11/2018
Zip Co Ltd (ASX: Z1P) $1.045 as at 28/11/2018
Event
The buy now pay later space has been dealt some good news today as investors read through ASIC’s latest media release.
AfterPay (ASX: APT) has added 4% and Zip Co (ASX: Z1P) opened slightly higher as ASIC downplayed the need for the space to be regulated under the National Credit Act (NCA).
AfterPay Touch (ASX: APT) Chart
Under the NCA, these companies would be forced to do more thorough credit checks, including verifying income & expenses which would require serious investment into systems.
ASIC had this to say – “we consider that ASIC’s proposed product intervention power should be extended to all credit facilities regulated under the ASIC Act … it may be that buy now pay later providers should be required to comply with the National Credit Act. ASIC has not yet formed a view that this is necessary.”
In essence, although ASIC do want further regulatory power over the lenders, it hasn’t deemed it necessary to enforce their practices under the more stringent NCA.
Zip Co (ASX: Z1P) Chart
The lenders aren’t out of the woods yet though. A Senate review into pay day lenders and buy now pay later services is expected to commence early next year.
The spotlight is set to be shone on these credit facilities which could lead to further backlash against the space.
Market Matters Take/Outlook
