Franklin Templeton has secured approval from Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), to launch the first fully tokenised Ucits fund in the country.
The fund will utilise Franklin Templeton’s blockchain-enabled transfer agency platform, allowing shares to be issued and traded using blockchain technology. This is expected to improve transparency, security, and efficiency for investors.
The fund’s launch is anticipated in the coming months, and it will be the first of its kind in Luxembourg to use a public blockchain with proprietary technology. The firm said it will be distributed across Europe, subject to additional regulatory approvals.
The move is part of Franklin Templeton’s strategy to expand its presence in the digital assets market. Sandy Kaul, head of digital assets and industry advisory services at Franklin Templeton, noted that the company aims to explore further opportunities in this area.
‘Reshaping the industry’
“Disruptive technology and innovation in financial services is reshaping the industry and changing the fundamental rules for how to attract, secure, and serve clients,” Kaul said in a statement. “We believe that in the future, there may be opportunities to create other tokenised financial products, including interoperability with other digital assets and blockchain native facilities.”
A spokesperson for the firm said details about the new fund could not be disclosed at this time.
Franklin Templeton has been investing in digital assets infrastructure over the past four years, with a focus on regulatory requirements, custody, digital wallet services, and risk management. The company sees blockchain technology as a way to link traditional asset management services with the transactional benefits of decentralised platforms.
This is not the firm’s first use of blockchain. In April 2021, Franklin Templeton launched the Franklin OnChain U.S. Government Money Fund, which was the first U.S.-registered mutual fund to use a public blockchain for processing transactions and recording share ownership. The company believes blockchain offers advantages over traditional systems, including enhanced security and a reduction in administrative costs.
Tokenisation and blockchain are becoming more prominent within the financial industry, with many seeing the technology as a way to increase liquidity and transparency. Asset managers aim to apply these advantages to traditional financial products, potentially reducing costs and streamlining administration.