Huoxing Finance reports that global investment management firm Franklin Templeton is exploring regulatory exemptions to allow tokenized money market funds and ETFs to trade on blockchain-based venues. On October 9, the company met with staff from the SEC’s cryptocurrency task force to discuss legal issues related to pricing, fees, and asset pools. The agenda included whether investors could exchange blockchain-based fund shares for tokenized National Market System equities via blockchain trading venues, and whether liquidity providers could charge service fees. These issues involve the Investment Company Act’s pricing rules and whether exemptions are required. Regarding tokenized ETFs, Franklin Templeton also discussed forming trading pairs with tokenized equities, approved payment-stablecoins, or tokenized money market funds, and whether liquidity pools require exemptions under investment company regulations. As of its preliminary disclosure on September 30, the firm’s assets under management totaled $1.79 trillion. Franklin Templeton’s blockchain fund recordkeeping initiative began with the Franklin Onchain U.S. Government Money Fund, launched in 2021. The BENJI token represents shares in this fund; transferring the token simultaneously transfers the underlying shares, with all transactions recorded and tracked by the Benji Technology Platform.
Franklin Templeton Explores Tokenized Fund Trading Exemption with SEC
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Summary
Franklin Templeton is advocating for regulatory clarity in SEC discussions to enable tokenized fund trading on blockchain platforms. The firm met with the U.S. Securities and Exchange Commission on October 9 to explore exemptions for blockchain-based money market funds and ETFs. Topics included pricing, fees, and asset pooling, as well as transactions involving tokenized Nasdaq-listed stocks. The company also examined liquidity pool requirements and permitted stablecoins for blockchain-related purposes. With $1.79 trillion in assets under management, Franklin Templeton launched its blockchain fund business in 2021 through the Franklin Onchain U.S. Government Money Fund, utilizing BENJI tokens on the Benji Technology Platform.
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