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SEC No-Action Letter Lets Franklin Funds Use Tokenized Fund
Franklin Templeton won SEC staff relief to let its funds invest in the $1.98B OnChain U.S. Government Money Fund, opening the door to tokenized assets in conventional portfolios.
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Franklin Templeton won a no-action letter from SEC staff that clears its mutual funds and ETFs to invest in the Franklin OnChain U.S. Government Money Fund, a tokenized money market fund using blockchain-based BENJI tokens.
The SEC’s Division of Investment Management issued the letter August 12. The relief allows Franklin funds to hold the OnChain Fund as a cash-management and securities-lending vehicle, with Franklin Templeton Investor Services serving as custodian. The SEC staff cautioned that the letter is not formal Commission approval and does not carry the force of law. It states staff would not recommend enforcement action under the described arrangement.
Franklin could begin placing the tokenized fund inside conventional portfolios as early as the fourth quarter, Bloomberg reported. Individual fund boards would still need to approve the move.