Franklin Templeton Seeks SEC Guidance on Tokenized Fund Trades
- Franklin Templeton reported preliminary assets under management of $1.79 trillion as of September 30.
- The firm proposed trading tokenized money market funds and ETFs through blockchain liquidity pools.
- Questions arose regarding exemptions from fund-pricing rules under the Investment Company Act of 1940.
- The SEC’s innovation exemption, issued on September 17, allows limited tokenized stock trading with conditions.
- Franklin Templeton’s BENJI tokens represent shares in their government money market fund, facilitating peer-to-peer transfers and dividend distributions.
Franklin Templeton is exploring regulatory clarity for trading tokenized fund shares via blockchain venues, focusing on potential exemptions from existing pricing rules. The SEC’s recent innovation exemption provides a temporary framework for such trades, emphasizing shareholder rights and transparency.
This exploration highlights the evolving landscape of digital asset management and regulatory adaptation to new financial technologies. Franklin Templeton’s initiative may pave the way for broader acceptance and integration of tokenized securities in traditional markets.(Source)
