Franklin Templeton Wins SEC Nod to Invest in Its Tokenized Fund

TL;DR:

• Franklin Templeton received a no-action letter from the SEC allowing its funds to invest cash in its own tokenized money market fund.
• The SEC also authorized FTIS to act as custodian of the tokenized funds and hold their private keys without adhering to current physical custody rules.
• The firm manages $2.5 billion in onchain assets and ranks fifth among the largest tokenized asset managers, according to RWA.xyz.

Franklin Templeton received regulatory approval from the U.S. Securities and Exchange Commission (SEC) to allow its funds to invest cash directly in its own tokenized money market fund.

The regulator issued a no-action letter, stating it will not pursue enforcement action if the firm’s managers allocate capital to the Franklin OnChain U.S. Government Money Fund, a tokenized fund that invests in U.S. government securities and aims to maintain a share price of $1.

The fund generates yield and operates on blockchain infrastructure, which sets it apart from traditional money market vehicles. The no-action letter was issued in response to a formal request submitted by Franklin Templeton on the same day.

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