SEC allows Franklin Templeton funds to invest in onchain money fund
The SEC said it will not pursue enforcement action if Franklin Templeton’s funds start investing cash in the asset manager’s own tokenized money market fund.
The Securities and Exchange Commission (SEC) has granted Franklin Templeton permission to invest cash in its own tokenized money market fund, without needing to comply with traditional custody regulations. This decision came in response to Franklin Templeton's formal request, allowing the asset manager to allocate capital to the Franklin OnChain U.S. Government Money Fund, a stable interest-bearing tokenized fund backed by U.S. government securities.
The SEC has set 12 conditions for the investment, including implementing safeguards to prevent unauthorized transactions, and requiring the affiliated transfer agent, Franklin Templeton Investor Services (FTIS), to manage the tokenized funds and maintain their private keys without adhering to physical-custody rules. Franklin Templeton manages $2.5 billion in onchain assets through its tokenized funds, positioning the firm as the fifth-largest player in this niche market, according to RWA.xyz.
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