Franklin Templeton has received regulatory permission to invest in its own blockchain-based money market fund, subject to certain restrictions and without applying the physical asset custody rules.
On Wednesday, the U.S. Securities and Exchange Commission (SEC) issued a no-action letter stating it would not take enforcement action if Franklin Templeton fund managers invest in the Franklin OnChain U.S. Government Money Fund—a tokenized income-generating fund investing in U.S. government securities and aiming to maintain a net asset value of $1 per share.
The SEC also permitted the affiliated transfer agent Franklin Templeton Investor Services (FTIS) to act as custodian for the tokenized funds and hold their private keys without complying with existing physical custody rules. This followed Franklin Templeton's formal no-action request submitted earlier on Wednesday.
Franklin Templeton manages $2.5 billion in on-chain assets through tokenized funds and ranks fifth among the largest tokenized asset management companies, according to RWA.xyz data.
In June, the asset management firm launched a separate crypto asset division and acquired crypto asset management company 250 Digital, expanding its presence in the crypto market and the tokenization segment.
The SEC's letter lists 12 conditions. Among them are requirements for Franklin Templeton to maintain systems preventing unauthorized disposal of assets and for FTIS to ensure administrative controls, including the ability to correct, freeze, transfer, and restore records.
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