The U.S.
Securities and Exchange Commission’s Division of Investment Management has issued a no-action letter to Franklin Templeton, clearing the way for the firm’s traditional registered funds to invest in its blockchain-based OnChain U.S.
Government Money Fund.
In the letter, posted Wednesday, the SEC cites Section 17(f) and Rule 17f-2 of the Investment Company Act of 1940, enabling registered funds to hold shares of the onchain money market fund for cash management without meeting certain physical-vault requirements.
"Essentially, it opens the door for Franklin’s registered funds (mutual funds, ETFs, etc) to hold its OnChain fund despite not technically satisfying 1940 Act custody rules," Bloomberg analyst James Seyffart said on X.
