The U.S. SEC has delayed its planned "innovation exemption" for tokenized securities and canceled an August 14, 2026 meeting on crypto startup rules. The delay follows concerns from the White House regarding ongoing negotiations over the Digital Asset Market Clarity Act, alongside opposition from Wall Street trade group SIFMA. Meanwhile, the SEC issued a landmark no-action letter to Franklin Templeton, establishing a 12-condition compliance blueprint that permits its registered funds to invest in the $726 million tokenized BENJI fund.
SEC Franklin Templeton tokenization blueprint
- ▪The U.S. Securities and Exchange Commission's Division of Investment Management issued a no-action letter to Franklin Templeton on August 12, 2026, permitting its registered mutual funds and ETFs to invest in the Franklin OnChain U.S. Government Money Fund for cash management.
- ▪The Franklin OnChain U.S. Government Money Fund, which runs on Stellar, Ethereum, and Solana, holds approximately $726 million in assets, with roughly two-thirds residing on Stellar.
- ▪The U.S. Securities and Exchange Commission's no-action letter to Franklin Templeton provides a regulatory blueprint with 12 conditions, including daily reconciliations, surprise audits, and smart-contract administrative key transfers, to satisfy Section 17(f) and Rule 17f-2 custody requirements.
SEC innovation exemption delay
- ▪The U.S. Securities and Exchange Commission is set to further delay its planned "innovation exemption" designed to ease regulatory hurdles for trading tokenized securities on blockchain rails.
- ▪The U.S. Securities and Exchange Commission abruptly canceled an open meeting scheduled for August 14, 2026, during which it was expected to consider "Reg Crypto" rules for startup fundraising and share details of the innovation exemption.
- ▪The U.S. Securities and Exchange Commission previously delayed the release of the innovation exemption in May 2026 amid concerns from companies over the potential inclusion of synthetic security tokens.
White House legislative concerns
- ▪The U.S. Senate began a five-week recess in August 2026 without voting on the Digital Asset Market Clarity Act, reducing the momentum for the bill's quick advancement.
- ▪The White House expressed concern that the U.S. Securities and Exchange Commission's proposed innovation exemption could complicate ongoing congressional negotiations over the Digital Asset Market Clarity Act.
Wall Street opposition
- ▪Wall Street trade group SIFMA has emerged as a primary opponent halting the U.S. Securities and Exchange Commission's innovation exemption initiative.
- ▪SIFMA submitted a letter to the U.S. Securities and Exchange Commission on June 30, 2026, arguing that significant market-structure changes should occur through formal notice-and-comment rulemaking rather than exemptions.
Blockchain market structure concerns
- ▪In June 2026, the U.S. Securities and Exchange Commission proposed eliminating Rule 611 of Regulation NMS, a move viewed as removing a major regulatory obstacle to tokenized securities trading.
- ▪Financial firms raised concerns about how blockchain-based trading venues would comply with Regulation NMS, which requires brokers to execute trades at the best available protected quotation.
SEC crypto regulatory shift
- ▪Under Chairman Paul Atkins, the U.S. Securities and Exchange Commission has shifted toward supporting tokenization and has dropped several lawsuits against cryptocurrency companies like Coinbase and Binance.
- ▪U.S. Securities and Exchange Commission Chairman Paul Atkins stated in March 2026 that the regulator could propose "safe harbor" rules to simplify token sales and fundraising for crypto startups.
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