Franklin Templeton funds gain SEC staff custody relief to manage cash with onchain BENJI

SEC Division of Investment Management staff said they would not recommend enforcement action under section 17(f) and Rule 17f-2 if Franklin Templeton Investor Services LLC (FTIS) serves as custodian for the Funds' shares of the Franklin OnChain U.S. Government Money Fund without complying with paragraphs (b), (e) and (f). Because FTIS is affiliated with the Funds, the arrangement constitutes self-custody; the staff relied on a 1992 no-action letter for affiliated book-entry shares. FTIS maintains the official record via a blockchain-integrated system, controls private keys on Stellar wallets, and must preserve Administrative Controls and transition records to any successor.

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