SEC Grants First Exemptive Order for Tokenized Money Market Fund Trading
Summary
On February 23, 2026, the SEC issued its first exemptive order permitting continuous trading and settlement for a tokenized government money market fund. The order grants relief from Sections 22(d) and 17(d) of the Investment Company Act of 1940 and associated rules, enabling the fund to trade shares at a stable $1.00 NAV through blockchain technology. The fund sponsor highlighted faster settlement, real-time liquidity access, and elimination of T+1 delays as key benefits.
What changed
The SEC granted its first exemptive order authorizing continuous trading and settlement for a tokenized government money market fund. The order exempts the fund from pricing requirements under Section 22(d) of the Investment Company Act and affiliated transaction restrictions under Section 17(d), permitting the affiliated distributor to buy and sell fund shares at $1.00 per share from inventory on a continuous basis. The fund uses blockchain technology through its transfer agent and supports peer-to-peer transactions in tokenized shares.
Broker-dealers and investment advisers involved in fund distribution should monitor for similar applications, as this order establishes a precedent for tokenized fund structures. The SEC's approval of expanded broker-dealer activities for principal trading of registered fund shares signals regulatory openness to modernized fund operations, though each exemptive application will be evaluated on its specific merits.
What to do next
- Monitor for additional SEC exemptive orders on tokenized securities
- Review broker-dealer arrangements for tokenized fund distribution
Archived snapshot
Apr 7, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 7, 2026
SEC Approves Intraday Trading and Settlement for Tokenized Money Market Fund
LinkedIn Facebook X Send Embed
On February 23, 2026, the SEC, for the first time, granted an exemptive order permitting continuous trading and settlement for an SEC-registered, tokenized government money market fund.
The fund is a registered government money market fund that seeks to maintain a stable $1.00 net asset value (NAV) per share. Through its transfer agent, the fund uses blockchain technology to maintain a record of its shares, and also permits certain peer-to-peer transactions in tokenized fund shares on applicable blockchains. In the application to the SEC, the fund, along with its investment adviser, affiliated distributor and affiliated transfer agent, requested an exemption from Section 22(d) of the Investment Company Act of 1940 and Rule 22c-1 thereunder, which generally require a registered open-end fund to sell or redeem its shares at a price based on the next-calculated NAV after receipt of a purchase or redemption request (the pricing relief). Specifically, the pricing relief permits the affiliated distributor (and any other registered broker-dealer that has entered into a dealer agreement with the fund or its distributor) to purchase and then sell fund shares to investors from its own inventory on a continuous basis at a price of $1.00 per share (plus or minus dealer compensation), rather than at a price based on the next-calculated NAV per share. Additionally, the applicants requested an exemption from Section 17(d) of the Investment Company Act and Rule 17d-1 thereunder, which regulate certain affiliated joint transactions involving registered funds, to permit the affiliated distributor to enter into an arrangement with the fund to trade its shares in reliance on the pricing relief.
In their application to the SEC, applicants note that offering investors the option to transact in this way offers meaningful benefits including “faster settlement, continuous access to liquidity, and greater operational flexibility,” as compared to traditional mutual fund transactions “that may involve end-of-day NAV pricing, delayed confirmations and/or longer operational settlement windows.” In a press release announcing the granting of the order, the fund sponsor further noted that the approved arrangement “lets investors move into yield-bearing assets in real time, eliminating T+1 delays of traditional markets, reducing cash drag and unlocking the efficiency and liquidity advantages of tokenized assets.” The sponsor also noted that the affiliated distributor had received approval from FINRA to expand its broker-dealer activities to include principal trading of registered fund shares.
The SEC’s order is available here and applicants’ amended application is available here.
[View source.]
Latest Posts
- Investment Services Regulatory Update - April 2026
- SEC Approves Intraday Trading and Settlement for Tokenized Money Market Fund
- SEC Staff Issues Additional Names Rule FAQs
- SEC’s Division of Enforcement Announces Updates to Enforcement Manual
- Director of SEC’s Division of Enforcement Delivers Remarks Outlining Division Priorities See more »
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
Attorney Advertising.
©
Vedder
2026
Written by:
Vedder Contact + Follow Jeremy Kritt + Follow Mark Quade + Follow Nathaniel Segal + Follow Jacob Tiedt + Follow Jake Wiesen + Follow
PUBLISH YOUR CONTENT ON JD SUPRA
- ✔ Increased readership
- ✔ Actionable analytics
- ✔ Ongoing writing guidance Join more than 70,000 authors publishing their insights on JD Supra
Published In:
Blockchain + Follow Broker-Dealer + Follow Digital Assets + Follow Exemptive Orders + Follow FinTech + Follow Investment Company Act of 1940 + Follow Investment Funds + Follow Money Market Funds + Follow Registered Investment Companies (RICs) + Follow Securities and Exchange Commission (SEC) + Follow Securities Regulation + Follow Settlement + Follow Tokenization + Follow Trading Platforms + Follow General Business + Follow Finance & Banking + Follow Science, Computers & Technology + Follow Securities + Follow more
Vedder on:
Solve with 2Captcha
Solve with 2Captcha
Named provisions
Related changes
Get daily alerts for JD Supra Finance & Banking
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
Source
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from Vedder Price.
The plain-English summary, classification, and "what to do next" steps are AI-generated from the original text. Cite the source document, not the AI analysis.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when JD Supra Finance & Banking publishes new changes.