Franklin Templeton Wins SEC Relief to Add Tokenized Assets to Traditional Funds

TLDR

• SEC staff relief allows Franklin funds to invest in its blockchain-based OnChain U.S. Government Money Fund.
• Franklin could use the tokenized money market fund for cash balances and securities lending collateral.
• Traditional ETFs and mutual funds could eventually hold tokenized assets through Franklin’s new investment structure directly.
• Franklin’s OnChain Fund uses blockchain recordkeeping while maintaining an official record of shareholder ownership separately.
• Individual fund boards must approve the arrangements before tokenized assets enter Franklin’s conventional investment portfolios.

Franklin Templeton is preparing to place tokenized assets inside conventional investment funds after receiving SEC staff relief that clears a regulatory path for its blockchain-based money market fund.

SEC Staff Provides No-Action Relief for Franklin Funds

The SEC’s Division of Investment Management issued a no-action letter on August 12 covering investments in the Franklin OnChain U.S. Government Money Fund. The staff said it would not recommend enforcement action if eligible Franklin funds use Franklin Templeton Investor Services as custodian for those investments, provided the firm meets specified conditions.

… Continue reading the full article at the original source below.