Franklin Templeton completes the final regulatory procedures before the listing of the Bitcoin dividend ETF

Franklin Templeton, with assets under management reaching $1.7 trillion, has completed the final regulatory step before the listing of two ETFs that convert stock dividends into Bitcoin. On October 22, the company submitted Form 8-A to the U.S. Securities and Exchange Commission to register shares of the Franklin US Equity Bitcoin DRIP Index ETF and the Franklin US Innovation Bitcoin DRIP Index ETF for trading on Nasdaq. The prospectus submitted on the same day indicates an effective date of October 27. These two funds were first filed in June of this year, with the codes and fees not disclosed at that time.

The stock fund code is FBEQ, which tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index. This index is weighted by market capitalization and holds the 500 largest companies in the U.S. by market value. As of September 30, it held 499 stocks, with a concentration in the information technology sector. The fund's initial allocation is 95% stocks and 5% Bitcoin, with regular or special dividends distributed by companies being used to purchase Bitcoin at the opening on the day after the ex-dividend date, increasing the Bitcoin allocation with each dividend payment. During quarterly rebalancing, any portion of Bitcoin allocation exceeding 5% will be reduced to 4.5%; if the Bitcoin allocation exceeds 20% between two rebalancing periods, it will be reduced to 4.5% within two trading days, with the funds returning to stocks. The fund does not directly hold on-chain Bitcoin but gains exposure through Bitcoin exchange-traded products (including its own spot fund), futures, options, or depositary receipts, with some achieved through a subsidiary in the Cayman Islands. The FBEQ fee is 0.09%, with no 12b-1 fees, managed by Franklin Advisory Services, and Franklin Templeton Institutional serving as a sub-advisor. The innovation fund employs the same mechanism, tracking the VettaFi US Innovation 100 Bitcoin DRIP Index, with components from the 100 largest non-financial companies listed on Nasdaq.

Franklin Templeton had previously filed for a spot Bitcoin ETF in September 2023 and launched it in January 2024 under the code EZBC; in April of this year, it acquired 250 Digital and established an institutional digital asset division, Franklin Crypto. These two DRIP funds extend this strategy to a group of investors who will not purchase Bitcoin on their own.