OSC Issues Cease Trade Order for Emerge ETFs

ETFs cease trading after financial statement deadline missed, auditor quit last November.

Andrew Willis 11 April, 2023 | 3:51PM
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The Ontario Securities Commission (OSC) has issued a cease trade order (CTO) for all Emerge ETFs over a failure to file audited financial statements.

“The CTO was issued as a result of the Emerge ETFs missing the deadline to file audited annual financial statements, management's reports of fund performance and associated filings,” said a release from Emerge Canada yesterday.

The order was issued last Thursday, April 6, after the company’s former auditor BDO Canada LLP resigned from Emerge on Nov. 3rd, 2022. Since then, Emerge has been “engaged in securing a new auditor,” the release said, “Once a new auditor is secured, [Emerge] will expeditiously work to complete and file the Annual Filings and seek to have the CTO lifted.”

The cease trade order issued by the OSC specifies two periodic disclosures not filed: audited annual financial statements and audited management report of fund performance. Both disclosures are for the year ended Dec. 31, 2022.

“There is no other material information concerning the affairs of the Emerge ETFs that has not been generally disclosed,” said Emerge, while adding: “There is no assurance that the Emerge ETFs will be able to remedy their filing default and have the CTO lifted in a timely manner or at all.”

11 ETFs are affected, including those-sub-advised by Cathie Wood’s ARK Invest like Emerge ARK Global Disruptive Innovation ETF (EARK), with exposure similar to ARK Innovation ETF (ARKK). Affected ETFs also include sustainable and global equity offerings from Emerge. 

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About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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