Franklin Templeton Discusses Tokenized Funds and On-Chain Trading Mechanisms with the SEC

On October 9, Franklin Templeton held discussions with the U.S. Securities and Exchange Commission (SEC) crypto working group to talk about the direct exchange mechanisms for tokenized fund shares and tokenized U.S. stocks on blockchain trading platforms. The discussions focused on whether investors could directly exchange these assets, whether liquidity providers could charge service fees, and the applicability of pricing rules under the Investment Company Act. Both parties also discussed the feasibility of tokenized ETFs and tokenized stocks, the compliance of stablecoins or tokenized money market funds as trading pairs, and whether related liquidity pools would need to obtain exemptions from investment company regulations.

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