Ontario Securities Commission Publishes Study on Canadian ETF Market
TORONTO, June 19, 2025 /CNW/ - The Ontario Securities Commission (OSC) today published a detailed study examining the liquidity and arbitrage mechanism of Exchange-Traded Funds (ETFs) in Canada.
The OSC ETF study comes as the Canadian market has experienced significant growth over the last ten years, expanding to more than 1,200 ETFs with over $500 billion in assets by the end of 2024. Retail participation in ETFs, including trading activity, has also seen an increase over the last five years.
Despite this substantial growth, there has been limited research on how Canadian ETFs have functioned in recent years. The study focused on three key areas:
ETF secondary market liquidity;
Effectiveness of the arbitrage mechanism in ensuring that ETF market prices reflect their Net Asset Value (NAV); and
Potential drivers of ETF liquidity and the arbitrage mechanism.
The findings from this study informed the Canadian Securities Administrators (CSA) consultation on Enhancing Exchange-Traded Fund Regulation. The consultation was published concurrently with this report.
"ETFs have become popular among a broad spectrum of investors and have proven resilient in the face of recent financial and macroeconomic events," said Grant Vingoe, CEO of the OSC. "By using data-driven insights, we can better tailor policies to protect investors while fostering a robust ETF market."
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.
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