Franklin Templeton meets with SEC to discuss blockchain trading for tokenized funds

Franklin Templeton met with SEC Crypto Task Force staff on October 9, 2026 to discuss regulatory exemptions allowing tokenized money market funds and ETFs to trade through blockchain liquidity pools. The discussion focused on whether trading fund shares against tokenized stocks and assessing liquidity provider fees requires relief from 1940 Act fund-pricing rules, exchange regulations, and securities registration requirements. Concurrently, Franklin Templeton expanded its digital footprint by partnering with Animoca Brands on the NUVA marketplace on October 8, 2026, while maintaining tokenized Treasury products on Avalanche, where total market value reached $545 million.

Exemption requests for fund share pricing

• ▪Section 22(d) of the Investment Company Act of 1940 requires redeemable fund share sales to occur at the prospectus price, while Rule 22c-1 requires transactions at the next calculated net asset value.
• ▪Franklin Templeton's October 9, 2026 agenda asked whether trading tokenized money market fund shares against tokenized National Market System stocks or charging liquidity provider fees requires exemptions from Section 22(d) and Rule 22c-1.
• ▪Franklin Templeton met with Securities and Exchange Commission staff from the Crypto Task Force on October 9, 2026 to discuss regulatory exemptions for trading tokenized money market funds and exchange-traded funds on blockchain venues.

Regulatory status of blockchain liquidity pools

• ▪Franklin Templeton asked Securities and Exchange Commission staff whether liquidity provider interests in blockchain trading pools require relief under the Securities Act of 1933 and the Securities Exchange Act of 1934.
• ▪Franklin Templeton raised questions with Securities and Exchange Commission staff regarding whether blockchain liquidity pools that host tokenized exchange-traded fund trading require exemptions from investment company classification under the Investment Company Act of 1940.

Animoca Brands partnership and NUVA marketplace

• ▪Animoca Brands and Franklin Templeton agreed to co-author a four-part research series addressing the convergence of traditional finance and decentralized finance.
• ▪NUVA is a non-custodial vault marketplace built by Animoca Brands and Nuva Labs that launched on Ethereum Mainnet on May 13, 2026 using ERC-20 vault tokens.
• ▪Animoca Brands and Franklin Templeton announced a strategic partnership on October 8, 2026 to expand institutional access to tokenized real-world assets through the NUVA marketplace.

Tokenized assets on Avalanche network

• ▪Asset management firms Franklin Templeton and WisdomTree maintain tokenized real-world assets on the Avalanche blockchain network.
• ▪Tokenized U.S. Treasury products on the Avalanche blockchain grew roughly fourfold during 12 months leading to October 2026, reaching approximately $545 million as of an October 7, 2026 ecosystem update.

Debatable claims

• ▪The SEC should grant pricing exemptions to enable continuous blockchain trading of tokenized funds
• ▪Distributing tokenized fund assets through non-custodial DeFi vaults poses unacceptable smart contract risks
• ▪Liquidity provider interests in tokenized asset pools constitute distinct securities requiring federal registration
• ▪Blockchain liquidity pools hosting tokenized ETFs are investment companies under the Investment Company Act