F/m Investments, an asset manager overseeing $18 billion, filed an application with the U.S. Securities and Exchange Commission (SEC) Wednesday seeking exemptive relief to tokenize shares of its $6.3 billion U.S. Treasury 3 Month Bill ETF (TBIL).
If approved, TBIL would become the first registered 1940 Act fund to legally record share ownership on a blockchain while trading on traditional exchanges. The fund's shares held steady at $49.97 following the announcement.
The Hybrid Model
Unlike BlackRock’s BUIDL or Franklin Templeton’s FOBXX, which operate as separate digital-native funds, F/m’s proposal integrates tokenization directly into an existing ETF structure. The firm plans to use a permissioned blockchain to track ownership of TBIL shares under the same CUSIP as the traditional stock.
This dual-state model allows tokenized shares to maintain identical economic terms, voting rights, and fees (0.15%) as their off-chain counterparts. The filing explicitly aims to keep the digital assets within the guardrails of the Investment Company Act of 1940, ensuring third-party custody and board oversight remain intact.
Tokenization is coming to securities markets whether we file this application or not. The question is whether it happens inside the regulatory framework investors have relied on for 85 years, or without that set of protections. We'd rather build an on-ramp that marries technological innovation and investor protection. Alexander Morris, CEO of F/m Investments
Institutional Context
The application targets a critical gap in the Real World Asset (RWA) sector: liquidity and regulatory compliance for public funds. Current tokenized treasuries mostly function as private placements restricted to accredited investors or specific platforms. By modifying a publicly traded ETF, F/m is attempting to bridge the liquidity of the Nasdaq with the settlement speed of distributed ledgers.
Competitors are watching. With the tokenized treasury market now exceeding $9.5 billion, approval for TBIL could force other large issuers to seek similar relief to prevent capital flight to faster, blockchain-enabled rails.
