SEC Issues No-Action Letter to Franklin Templeton Allowing On-Chain Money Market Funds for Cash Management
The U.S. Securities and Exchange Commission's Investment Management Division has issued a no-action letter to Franklin Templeton, allowing its registered funds to use on-chain money market funds ($FOBXX) for cash management, including as collateral for securities lending.
This relief measure permits the custody and recording of fund share ownership through a blockchain-integrated system, rather than adhering to some traditional rules designed for physical securities.
Franklin Templeton stated that this structure supports intraday trading, hourly net asset value calculations, and faster transaction processing.
FOBXX is a series under the Franklin Templeton Trust that has achieved on-chain ownership records.
The related arrangements have received regulatory confirmation, subject to specific statements and control measures.
Market mechanisms are driven by the demand for tokenized funds and institutional cash management, with funds potentially flowing into on-chain money market products; beneficiaries are registered funds seeking efficient liquidity, while those under pressure rely on traditional custody and settlement processes.
This move further promotes the integration of traditional funds with blockchain infrastructure.
Source: Public Information
ABAB AI Insight
As a large asset management institution, Franklin Templeton is continuously advancing the on-chain transformation of money market funds, addressing custody and recording rule barriers through the SEC's no-action letter, enabling registered funds to use on-chain shares for daily cash and collateral management.
In terms of capital pathways, the company combines traditional fund products with blockchain systems, motivated by the desire to enhance transaction speed and flexibility, converting resources from existing money market assets directly into on-chain tools that support intraday operations.
Similar cases can be seen with other asset management institutions exploring tokenized government bonds or money market products, as well as the current limited openness of the SEC to innovative custody arrangements, with institutional fund operations gradually bridging traditional rules and on-chain efficiency.
This structural judgment reflects regulatory changes, with the mechanism being that the no-action letter provides a clear path for specific blockchain custody, reducing compliance uncertainty and accelerating institutional adoption of tokenized cash management tools.
ABAB News · Cognitive Law
The no-action letter is a passport for tokenized funds to enter institutional scenarios.
On-chain money market funds are reshaping cash and collateral management.
Intraday trading and hourly net asset value are the next targets for traditional fund efficiency.