The interim stop order relates to Australian Securities and Investments Commission's (ASIC) concerns regarding the target market determination for the company's buy-now-pay-later products, Humm said in a statement.
The company said it is complying with the requirements of the order, adding that it can continue to service existing customers to whom the product has already been provided.
Humm's update comes just days after Australia said it would regulate buy-now-pay-later services as a consumer credit product under new laws, forcing BNPL providers to carry out background checks before lending.
The move would put companies like Humm, Afterpay - owned by Jack Dorsey's Block Inc, and Zip Co under ASIC's watch.
Humm is Australia's third-largest BNPL provider with about 14% market share, according to IBIS World.
"Hummgroup is seeking to work closely with ASIC to urgently address the concerns raised in relation to the humm BNPL target market determination," the company said.
Shares of the company fell as much as 12.9% to A$0.370, their lowest level since March 24, 2020.
ASIC did not immediately respond to a request for comment.
(Reporting by Riya Sharma and Himanshi Akhand in Bengaluru; Editing by Devika Syamnath and Shailesh Kuber)
