Key Takeaways
- • Franklin Templeton (NYSE: BEN) met with SEC Crypto Task Force staff on Oct. 9, 2026 to ask whether regulatory exemptions could allow tokenized money market funds and ETFs to trade through blockchain venues, according to the primary source.
- • The firm reported preliminary assets under management of $1.79 trillion as of Sept. 30.
- • Key legal questions include whether Section 22(d) of the Investment Company Act of 1940 and Rule 22c-1 require exemptions for proposed trading pairs and liquidity-provider fees.
- • The meeting followed the SEC's innovation exemption issued Sept. 17, which temporarily exempts qualifying blockchain venues and liquidity providers, subject to conditions; no relief for Franklin's proposals has been granted yet.
- • The agenda also questioned whether liquidity pools themselves may need investment-company, Securities Act of 1933 and Securities Exchange Act of 1934 exemptions.
Summary
Franklin Templeton is exploring whether regulatory exemptions could allow tokenized money market funds and exchange-traded funds to trade through blockchain liquidity pools. According to the primary source, the global investment manager raised these questions with Securities and Exchange Commission staff on Oct. 9, during a meeting with the SEC Crypto Task Force. The firm reported preliminary assets under management of $1.79 trillion as of Sept. 30.
For money market funds, the proposed agenda considered whether investors could exchange blockchain-based fund shares for tokenized National Market System stocks through a trading pair on a blockchain venue. Franklin also asked whether liquidity providers supplying assets for those trades could charge service fees. The central legal issue is pricing. Section 22(d) of the Investment Company Act of 1940 generally requires sales at the price stated in a fund's prospectus, and Rule 22c-1 generally requires transactions at the next calculated share value. The agenda asks whether exemptions from these provisions are needed for the proposed pairs and provider fees.
For tokenized ETFs, the agenda considered trading pairs involving another tokenized stock, a permitted payment stablecoin, or a tokenized money market fund. It also flagged whether ETF shares would trade on a tokenized securities venue, which the agenda describes as distinct from a national securities exchange. The discussion further covered whether liquidity pools may themselves require exemptions from investment-company regulation, and whether liquidity-provider interests require relief under the Securities Act of 1933 and the Securities Exchange Act of 1934.
The discussions follow the SEC's innovation exemption, issued Sept. 17, which temporarily exempts qualifying blockchain venues and liquidity providers from certain exchange and dealer requirements. Conditions include trading-volume limits, equivalent shareholder rights, auditable public smart contracts, and trading halts aligned with the underlying stock's primary exchange. Per the publisher's context, no relief has been granted to Franklin Templeton, and key questions on pricing, fees and liquidity pools remain open.
The filing also builds on Franklin's existing tokenization business. BENJI tokens represent shares of the Franklin OnChain U.S. Government Money Fund (FOBXX), launched in 2021. An Aug. 12 SEC staff no-action position addressed custody arrangements for Franklin funds investing in BENJI. Franklin's Moonpay integration, announced June 2, and its May 12 partnership with Kraken parent Payward extend BENJI access to institutional trading and yield products.
For money market funds, the proposed agenda considered whether investors could exchange blockchain-based fund shares for tokenized National Market System stocks through a trading pair on a blockchain venue. Franklin also asked whether liquidity providers supplying assets for those trades could charge service fees. The central legal issue is pricing. Section 22(d) of the Investment Company Act of 1940 generally requires sales at the price stated in a fund's prospectus, and Rule 22c-1 generally requires transactions at the next calculated share value. The agenda asks whether exemptions from these provisions are needed for the proposed pairs and provider fees.
For tokenized ETFs, the agenda considered trading pairs involving another tokenized stock, a permitted payment stablecoin, or a tokenized money market fund. It also flagged whether ETF shares would trade on a tokenized securities venue, which the agenda describes as distinct from a national securities exchange. The discussion further covered whether liquidity pools may themselves require exemptions from investment-company regulation, and whether liquidity-provider interests require relief under the Securities Act of 1933 and the Securities Exchange Act of 1934.
The discussions follow the SEC's innovation exemption, issued Sept. 17, which temporarily exempts qualifying blockchain venues and liquidity providers from certain exchange and dealer requirements. Conditions include trading-volume limits, equivalent shareholder rights, auditable public smart contracts, and trading halts aligned with the underlying stock's primary exchange. Per the publisher's context, no relief has been granted to Franklin Templeton, and key questions on pricing, fees and liquidity pools remain open.
The filing also builds on Franklin's existing tokenization business. BENJI tokens represent shares of the Franklin OnChain U.S. Government Money Fund (FOBXX), launched in 2021. An Aug. 12 SEC staff no-action position addressed custody arrangements for Franklin funds investing in BENJI. Franklin's Moonpay integration, announced June 2, and its May 12 partnership with Kraken parent Payward extend BENJI access to institutional trading and yield products.
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