Key Takeaways
- • Franklin Templeton met with SEC Crypto Task Force staff and Division of Investment Management staff on October 9, 2026, to discuss 1940 Act issues arising under the SEC's proposed Innovation Exemption, according to an SEC meeting memorandum.
- • The agenda focused on whether tokenized money market funds and tokenized NMS ETFs require relief from Section 22(d) and Rule 22c-1 to trade on a tokenized securities venue (TSV) and allow liquidity providers to charge fees.
- • Franklin Templeton's attendees included Mike Muir (SVP/Head of FIRST Technology) and senior associate general counsels Navid Toffigh and Sarah Bessin.
- • The meeting also addressed whether liquidity pool interests would need relief from being treated as investment companies or securities under the 1933 and 1934 Acts.
Summary
Franklin Templeton representatives met with staff from the SEC's Crypto Task Force and Division of Investment Management on October 9, 2026, according to a memorandum posted on sec.gov. The meeting concerned the firm's digital assets business, including its FOBXX fund, and the SEC's Innovation Exemption, which would permit on-chain trading of NMS stocks through a tokenized securities venue without requiring a national securities exchange or alternative trading system.
The agenda centered on 1940 Act questions. Franklin Templeton asked whether tokenized money market fund shares, traded as part of a pair with a tokenized NMS stock on a TSV, require relief from Section 22(d) and Rule 22c-1, and whether a liquidity provider may charge a fee for its services. Similar questions were raised for tokenized NMS ETFs, including whether additional relief is needed for ETFs to trade on a TSV given that such a venue is not a national securities exchange.
The firm also asked whether a liquidity pool, which accepts deposits of specified tokenized assets in exchange for pool interests, would need exemption from investment company treatment and whether its interests would need relief from the 1933 and 1934 Acts. Franklin Templeton provided a document that was discussed during the meeting, and the agenda listed recommendations as a final item. The agenda was subject to revision before the meeting.
The meeting follows related SEC staff actions involving Franklin Templeton's blockchain-based products, as reported in news coverage, including no-action relief for an affiliated transfer agent to custody blockchain-recorded money market fund shares. Source coverage for this specific story was limited, and the summary relies on the SEC meeting memorandum and related headlines.
The agenda centered on 1940 Act questions. Franklin Templeton asked whether tokenized money market fund shares, traded as part of a pair with a tokenized NMS stock on a TSV, require relief from Section 22(d) and Rule 22c-1, and whether a liquidity provider may charge a fee for its services. Similar questions were raised for tokenized NMS ETFs, including whether additional relief is needed for ETFs to trade on a TSV given that such a venue is not a national securities exchange.
The firm also asked whether a liquidity pool, which accepts deposits of specified tokenized assets in exchange for pool interests, would need exemption from investment company treatment and whether its interests would need relief from the 1933 and 1934 Acts. Franklin Templeton provided a document that was discussed during the meeting, and the agenda listed recommendations as a final item. The agenda was subject to revision before the meeting.
The meeting follows related SEC staff actions involving Franklin Templeton's blockchain-based products, as reported in news coverage, including no-action relief for an affiliated transfer agent to custody blockchain-recorded money market fund shares. Source coverage for this specific story was limited, and the summary relies on the SEC meeting memorandum and related headlines.
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