Franklin Templeton Seeks SEC Regulatory Exemptions for Tokenized Funds
Asset management firm Franklin Templeton has initiated discussions with US regulators to facilitate blockchain-based trading for money market and ETF products.
Global investment powerhouse Franklin Templeton is pursuing regulatory clarity from the United States Securities and Exchange Commission to enable onchain secondary trading for tokenized assets. During formal deliberations with agency staff, the asset manager examined prospective exemptions that would allow tokenized money market vehicles and exchange-traded products to change hands on decentralized platforms, according to Bitcoin.com News.
Discussions centered on the intricate legal mechanics governing fund pricing, fee distribution, and the custody of pooled assets on public ledgers. Traditional fund structures rely on rigid daily settlement cycles and registered intermediaries, creating friction when mapped directly onto continuous, permissionless blockchain environments. The manager is actively seeking relief from legacy frameworks that restrict real-time pricing and peer-to-peer execution.
Institutional interest in real-world asset tokenization has surged over the past two years, with traditional managers racing to bring liquid products directly onto distributed ledgers. Franklin Templeton has been a pioneer in this vertical, having already launched onchain liquid products on several networks. However, secondary trading liquidity remains constrained because existing federal securities laws do not accommodate decentralized order books or automated market makers.
Market participants view these regulatory engagements as a critical step toward mainstream institutional decentralized finance. The primary risk revolves around potential agency reluctance, given ongoing enforcement disputes and strict interpretations of federal trading venue rules. Investors should monitor forthcoming SEC guidance notes or formal exemption filings to evaluate whether tokenized fund liquidity will expand beyond accredited institutional silos.
Key takeaways
- Franklin Templeton met with SEC officials to explore onchain trading exemptions.
- Discussions tackled regulatory obstacles surrounding real-time fund pricing and fee models.
- Approval could unlock broader secondary market liquidity for tokenized institutional funds.