SEC no-action letter lets Franklin Templeton funds sweep cash into BENJI
Key points
- The SEC issued a no-action letter on 13 August 2026 allowing Franklin Templeton's other funds to park cash in the BENJI tokenised money market fund, which holds approximately $726 million in assets under management.
- Both Franklin's request and the SEC's response carry the same date, indicating the relief was fully pre-negotiated rather than arising from a standard review process.
- BENJI, launched in 2021 as the first tokenised money market fund from a major incumbent asset manager, offers hourly NAV calculations and intraday trading versus the once-daily pricing of conventional money market funds.
- The SEC conditioned the relief on a requirement that if the transfer agent changes, smart contract administrative keys and controls must transfer to the successor, a condition that could become a structural template for tokenised fund arrangements.
- Franklin Templeton plans to use BENJI for cash and for securities-lending collateral, and the firm's Stellar-based architecture allows it to intervene directly in cases of error, theft, or lost keys.
The US Securities and Exchange Commission has issued a no-action letter permitting Franklin Templeton‘s own funds to hold cash in BENJI, the firm’s tokenised money market fund, which carries roughly $726 million in assets under management. The letter, dated the same day as Franklin’s incoming request, signals that the relief was fully pre-negotiated rather than the result of a conventional review cycle.
Franklin Templeton launched BENJI in 2021 as the first tokenised money market fund from a major incumbent asset manager, and the firm has long swept excess cash from its other funds into internal money market vehicles. BENJI’s blockchain architecture changes the calculus: where conventional money market funds price once daily and accept trades in narrow windows, BENJI offers hourly net asset value calculations, intraday trading, faster settlement, and the prospect of lower costs. Franklin also intends to use BENJI for cash and securities-lending collateral.
The SEC’s comfort level rested heavily on the degree of institutional control Franklin retains. Its in-house transfer agent treats the Stellar blockchain as the primary transaction record, and Stellar’s native architecture, now extended with a smart contract wrapper, allows Franklin to intervene directly if tokens are lost, stolen, or misdirected. Staff attached one notable condition: if the transfer agent ever changes hands, administrative keys and smart contract controls must pass to the successor, a requirement that observers may come to read as a structural template for tokenised fund arrangements more broadly.
The larger question the letter raises is about scale. BENJI at $726 million is already substantial, but sweeping across multiple Franklin funds could push balances materially higher. The timing also draws attention to October, when DTCC‘s tokenised Treasuries are expected to go live, making the coming months a period worth tracking closely for anyone mapping the competitive dynamics of tokenised cash instruments.
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