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Asset manager Emerge Canada Inc. says it is in the process of finalizing a plan to wind up or sell its Toronto-based business after a suspension of its registration last week.

The Ontario Securities Commission suspended the exchange-traded funds provider from being an investment fund manager, a portfolio manager and an exempt market dealer after finding the company failed to comply with working capital requirements.

In its decision, the OSC said that before that suspension takes effect, it has imposed interim terms and conditions to restrict Emerge Canada from conducting any registrable activities, except those necessary for an orderly wind-down of its funds.

In a statement released Monday, Emerge Canada said investors in the Emerge ETFs will receive prior notice of the required wind up or sale, provided certain regulatory approvals are obtained. RBC Investor Services will continue to act as custodian of the assets of the Emerge ETFs.

The ETFs are linked to prominent U.S. investor and ARK Investment Management LLC chief executive officer Cathie Wood. ARK is a subadviser to U.S.-based Emerge Capital Management Inc., which in turn is a subadviser to Emerge Canada.

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Last month, the OSC surprised investors when it imposed a temporary trading halt on the company’s funds. At the same time, The Globe reported that Emerge Canada, which manages about $118-million in assets, owed a total of $2.53-million to its six Emerge ARK funds.

Last week, the OSC revealed Emerge Canada owes $5.5-million to the ARK ETFs – an amount far higher than disclosed on its most recent public financial statements.

The OSC decision last week disclosed for the first time that Emerge Canada is short of cash because it hasn’t collected money from Emerge Capital. The amount owed totalled about $4.5-million as of last Sept. 30, and about $3.4-million as of March 31, the OSC said.

On Monday, Emerge Canada said the wind-up or sale of the management contracts will be supervised by a manager appointed by the OSC. The OSC decision said that once Emerge Canada’s business operations have been effectively concluded, Emerge Canada’s suspension will be complete.

“The Cease Trade Order announced on April 10, 2023, remains in effect and no assurances can be given on the timing of an audit of the 2022 financial statements of the Emerge ETFs,” Emerge said in a statement.

The company first ran into issues last year, when Emerge Canada revealed in mid-December that BDO Canada LLP had resigned as the auditor of its funds nearly six weeks earlier.

Emerge Canada said on Monday it has not yet engaged an auditor for the Emerge ETFs.

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