The action follows a CTO issued by the OSC earlier this year
Eleven Canadian ETFs will be terminated following a cease to trade order issued by the Ontario Securities Commission.
Emerge Canada Inc. was served the CTO in April 2023 precipitated by the firm’s failure to file audited annual financial statements, fund performance reports, and associated filings for the fiscal year ended December 31, 2022, by the prescribed March 31, 2023, deadline.
The suite of exchange-traded funds were launched in 2022 and were the first to bring the strategies run by Cathie Wood’s ARK Investments to Canada.
Following the CTO, Lisa Langley, Emerge Canada’s CEO vowed to continue: “Once our audits are complete, we will file the required documents with the OSC to lift the CTO. We are working diligently to complete this,” she told Wealth Professional in April.
However, a month later, the firm was forced to cease operations for failing to comply with the OSC’s working capital requirements. The regulator said the firm had been given “ample opportunity” to comply while the firm called the action “overly punitive and unwarranted.”
Just days later Emerge Canada said it was working on plans to close its business having argued that this was not in the best interests of unitholders.
Termination of funds
Fast forward to October 19 and Emerge has announced that it will terminate the following ETFs it manages on or about December 20, 2023:
- Emerge ARK Global Disruptive Innovation ETF
- Emerge ARK Genomics & Biotech ETF
- Emerge ARK Fintech Innovation ETF
- Emerge ARK AI & Big Data ETF
- Emerge ARK Autonomous Tech & Robotics ETF
- Emerge ARK Space Exploration ETF
- Emerge EMPWR Sustainable Dividend Equity ETF
- Emerge EMPWR Sustainable Select Growth Equity ETF
- Emerge EMPWR Sustainable Global Core Equity ETF
- Emerge EMPWR Sustainable Emerging Markets Equity ETF
- Emerge EMPWR Unified Sustainable Equity ETF
The assets of the funds will be liquidated with investors receiving the net proceeds from the liquidation of the ETF’s assets, less all liabilities and all expenses incurred in connection with the dissolution of the ETF, on a pro rata basis.
Units of the ETFs will be delisted from Cboe Canada on or about October 23, 2023. Because of the cease trade order, all trading of units of the ETFs on Cboe Canada stopped as of April 6, 2023. The ETFs also ceased issuing any new units as of April 6, 2023.
“Emerge Canada strongly encourages investors in the ETFs to consult with their financial advisors to understand the financial and tax implications associated with the termination of the ETFs and to discuss their investment options,” the firm said in a statement Thursday.
