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Franklin Templeton Gets SEC Nod for Own Tokenized Fund Cash
The SEC no-action letter lets Franklin Templeton funds buy into its own blockchain money market fund, with a key custodian exemption for its affiliate FTIS.
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Franklin Templeton received a no-action letter from the U.S. Securities and Exchange Commission allowing its funds to invest cash directly into the firm's own tokenized money market vehicle.
The regulator said it will not pursue enforcement if the company's managers allocate capital to the Franklin OnChain U.S. Government Money Fund, a tokenized fund that holds U.S. government securities and targets a $1 share price. The fund generates yield and runs on blockchain infrastructure, separating it from traditional money market funds.
A key piece of the decision covers Franklin Templeton Investor Services (FTIS), the firm's affiliated transfer agent. The SEC will let FTIS act as custodian of the tokenized funds and hold their private keys without complying with current physical custody rules. That concession is significant for the asset manager, which had asked for the relief the same day the letter was issued.