SEC clears Franklin mutual funds and ETFs to invest in BENJI

Franklin Templeton’s registered mutual funds and ETFs have received regulatory clearance to invest in the firm’s blockchain-based OnChain U.S. Government Money Fund after the U.S. Securities and Exchange Commission’s investment management division issued a no-action letter covering the custody structure. Summary The SEC has cleared Franklin Templeton’s registered funds to invest in its blockchain based BENJI money market fund. The no action letter allows mutual funds and ETFs to hold BENJI shares without meeting certain physical custody requirements. BENJI uses blockchain records alongside Franklin’s traditional transfer agent system, with private keys remaining under the firm’s control. The fund holds about $726 million in assets and invests primarily in U.S. government securities. The SEC’s Division of Investment Management said in the letter posted Wednesday that it would not recommend enforcement action under Section 17(f) and Rule 17f-2 of the Investment Company Act of 1940 if Franklin’s registered funds hold shares of the OnChain U.S. Government Money Fund, known by its ticker FOBXX, under the proposed arrangement. The relief addresses custody rules originally designed around...