U.S. SEC issues Franklin Templeton no-action letter on on-chain government MMF

Franklin Templeton has received a no-action letter from the U.S. SEC related to an on-chain government money market fund, Bloomberg ETF analyst James Seyffart said. The letter means the SEC would not recommend enforcement action over a specific activity if the stated conditions are met, even if there could otherwise be concerns about a legal violation. Seyffart said the move opens a path for Franklin’s registered funds, including mutual funds and ETFs, to hold on-chain funds even if they do not technically satisfy custody rules under the Investment Company Act of 1940.