The Afterpay Touch Group Ltd (ASX: APT) share price was the top ASX200 performer today after announcing an update regarding its AUSTRAC audit report.
Afterpay has given AUSTRAC the final audit report after the external independent auditor finished his review.
The audit report included a reference to matters of historic non-compliance by Afterpay and made recommendations about Afterpay's ongoing AML/CTF compliance. The auditor said that the non-compliance was due to incorrect legal advice.
However, the auditor did confirm that Afterpay's current program is aligned with the AML/CTF Act and that Afterpay is a low risk business in regards to its vulnerability to be used for money laundering or terrorist financing.
The company also reaffirmed that it has not identified any money laundering or terrorism financing activity on its systems to date.
It's now in AUSTRAC's hands about whether any further action will be taken. Afterpay will continue to cooperate with AUSTRAC the audit report and its general AML/CTF compliance.
Whilst it wasn't a complete victory for Afterpay, the audit report doesn't sound as bad as it could have been.
Indeed, the auditor wrote "Afterpay has a strong compliance culture, supported at the highest levels…As a result of the increased resource allocation, Afterpay's transaction monitoring system is now effective, efficient and intelligent."
As Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have experienced, AUSTRAC is making its presence felt in the financial system.
Foolish takeaway
Any bit of good news from Afterpay is met by a sharp increase in price, so it's not surprising to see today's strong positive reaction. Afterpay isn't going to make it into my portfolio, but I can see why some investors want to put it into their own portfolio after today.