SEC Grants Franklin Templeton Approval to Invest in Its Own Tokenized Money Fund

Franklin Templeton has received regulatory clearance from the US Securities and Exchange Commission to allow its funds to invest cash directly into its blockchain-based money market fund, under a specific set of guardrails.

No-Action Letter Clears the Path

The SEC issued a no-action letter confirming it will not pursue enforcement if Franklin Templeton fund managers invest in the Franklin OnChain US Government Money Fund, an interest-bearing tokenized fund that holds US government securities and aims to maintain a stable one-dollar share price. The decision came in response to a formal request Franklin Templeton submitted earlier the same day.

Custody Rules Get an Exception

As part of the approval, the SEC will allow Franklin Templeton Investor Services, the firm’s affiliated transfer agent, to act as custodian for the tokenized funds and hold their private keys without following traditional physical-custody requirements. However, the SEC outlined 12 specific conditions, including systems to prevent unauthorized instructions and administrative controls allowing FTIS to correct, freeze, migrate or restore records when necessary.

Part of a Broader Tokenization Push

Franklin Templeton currently manages 2.5 billion dollars in onchain assets, ranking it as the fifth-largest tokenized asset manager. The approval follows the firm’s recent launch of a dedicated crypto division and its acquisition of crypto asset manager 250 Digital in June, signaling deeper investment into blockchain-based financial products.