Crypto▲ Bullish
SEC Clears Franklin Templeton BENJI Fund for Registered Portfolios
The SEC cleared Franklin Templeton's registered funds to hold shares of the BENJI tokenized money market fund, removing custody barriers that had kept blockchain-based products out of mutual fund portfolios.
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Franklin Templeton received SEC approval that allows its registered mutual funds and ETFs to invest directly in the firm's BENJI tokenized money market fund. The no-action letter from the SEC's Division of Investment Management addresses custody rules that had blocked such allocations.
The relief covers Section 17(f) and Rule 17f-2 of the Investment Company Act, which require physical custody of securities. FOBXX, the underlying fund, issues shares on a blockchain and does not use paper certificates. The SEC accepted Franklin's framework where the transfer agent maintains official shareholder records while Franklin Templeton Investor Services holds the private keys to Stellar network wallets.