Franklin Templeton Gains SEC Approval for Tokenized Funds in Conventional Products

Franklin Templeton has secured US regulatory clearance to place its $726 million tokenized money-market fund, BENJI, inside conventional mutual funds and ETFs as early as the fourth quarter.

The SEC relief covers custody rules under the Investment Company Act of 1940 and allows Franklin funds to hold FOBXX without following certain requirements designed for assets represented by paper certificates.

Franklin's proposed structure combines on-chain transaction data with its established transfer-agent system, retaining control over tokenized shares and allowing for corrections and record restoration when needed.

The arrangement means an otherwise conventional Franklin ETF or mutual fund could gain exposure to a blockchain-recorded security without requiring its shareholders to open a crypto wallet or purchase BENJI directly.