Emerge ETFs hit with cease-trade order after failing to file financial statements

The Ontario Securities Commission last week imposed a cease-trade order (CTO) on all Emerge Canada Inc. ETFs after the Toronto-based fund company missed its deadline to file audited annual financial statements.

BDO Canada LLP resigned as Emerge’s auditor on Nov. 3, 2022, and the firm hasn’t yet found a new one. As a result, Emerge didn’t file its audited financial statements and management reports of fund performance for the 2022 fiscal year before the March 31 deadline.

In a release on Monday, Emerge said that once it finds a new auditor, it will “expeditiously work to complete and file the annual filings and seek to have the CTO lifted.”

However, the firm also noted that “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.” In the meantime, it said fundholders should contact their investment advisors or Emerge’s customer relations team.

The CTO was imposed on Thursday, April 6.

Emerge filed a letter on Dec. 14 stating BDO had resigned as auditor of the Emerge funds on Nov. 3 and that there were “no reservations” in BDO’s auditors’ reports for the previous two financial years.

“Annual financial statements have not yet been filed in respect of the 2022 Emerge Funds, as the 2022 Emerge Funds were established in August 2022,” the letter from Emerge CEO Lisa Langley stated.

It added that there were no “reportable events,” or accounting issues, with the funds.

The CTO covers Emerge’s 11 ETFs, including its six funds with Cathie Wood’s ARK Investments launched in 2019 and 2021, and its suite of five funds managed by women that began trading last year.

Mark Burgess

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Mark was the managing editor of Advisor.ca from 2017 to 2024.