Markets · Tokenization
Federated Hermes Picks Prometheum Broker-Dealers to Distribute Tokenized Funds
The plan routes custody, clearing and settlement through Prometheum's SEC-registered broker-dealer, but no fund or chain is named and the first product is targeted for Q1 2027.
Federated Hermes plans to issue tokenized securities funds that would be held, cleared and settled by Prometheum Capital LLC, an SEC-registered, FINRA member broker-dealer, and offered to introducing broker-dealers through Prometheum's correspondent clearing platform, the two companies said in a joint release on Oct. 13 (source 1).
Nothing is live yet. The release names no fund and no blockchain, and it says the firms expect to bring the first tokenized fund product to market in Q1 2027 (source 1). It calls the arrangement a strategic partnership and a "planned collaboration" (source 1).
Who does what
The release splits the work across Prometheum's broker-dealer subsidiaries. Prometheum Capital will custody, clear and settle the products on behalf of its customers and make Federated Hermes' tokenized products available to introducing broker-dealers through correspondent clearing (source 1). ProFinancial, Inc., another Prometheum broker-dealer, will support distribution (source 1).
Federated Hermes brings the funds and the management. The release describes it as a global leader in active investment management with $911.6 billion in assets under management as of June 30, 2026, and says it will bring "a growing suite of tokenized solutions in global markets" (source 1).
In correspondent clearing, an introducing brokerage keeps the customer relationship and hands custody, clearing and settlement to a clearing firm. In this plan, that clearing firm is Prometheum Capital (source 1).
Brokers and advisers
The release names introducing broker-dealers as the firms that will get access through Prometheum Capital's clearing platform (source 1). Registered investment advisers appear in a quote, not in the description of the plumbing. "Tokenized funds are the logical next step for our broker-dealer and RIA clients, who increasingly see demand for on-chain access to traditional investments," said Kevin Barr, Director of Digital Assets at Federated Hermes (source 1).
The release also says the collaboration is meant to bring on-chain access "to the brokerage accounts and advisor relationships through which many Americans already invest" (source 1). It does not say how an adviser who is not a broker-dealer would reach the products.
| Item | What the release says |
|---|---|
| Parties | Prometheum Inc. and Federated Hermes, Inc. (NYSE: FHI) |
| Announced | Oct. 13, 2026, via Business Wire |
| Status | Strategic partnership, described as a planned collaboration |
| Issuer | Federated Hermes, of tokenized securities funds |
| Custody, clearing, settlement | Prometheum Capital LLC, SEC-registered, FINRA member broker-dealer |
| Distribution support | ProFinancial, Inc. |
| Access route | Introducing broker-dealers, via Prometheum Capital's correspondent clearing platform |
| Advisers | RIA clients named in a Federated Hermes quote |
| Fund named | None |
| Blockchain named | None |
| First product | Targeted for Q1 2027 |
| Fees, size, share classes | Not disclosed |
The pitch
Prometheum's case is that tokenized funds have so far lived outside the brokerage system. "Until now, tokenized funds have primarily been issued on platforms that sit outside the mainstream brokerage system where most Americans invest," said Aaron Kaplan, founder and co-CEO of Prometheum Inc., who called the deal "a blueprint for how the securities industry can issue and distribute digital securities" (source 1).
The release points to money market funds as a notable use case in the tokenized asset market so far (source 1). It does not say that the first Federated Hermes product will be a money market fund, and we do not assume it.
In Le Coin's view, the distribution route is the news here, not the token. The release says tokenized funds have so far primarily been issued on platforms outside the mainstream brokerage system, and a product that sits in a brokerage account, cleared by a registered broker-dealer, could reach a different buyer, if introducing brokers sign up. The release names none that have.
In Le Coin's view, Q1 2027 is also a target, not a date. The release frames the timing as an expectation and carries the usual forward-looking caveats (source 1).
What to watch
The open questions are the ones the release leaves blank: which fund comes first, which chain records the shares, what it costs and which brokerages offer it. Prometheum's own description lists Prometheum ATS for secondary trading and Prometheum Coinery as an SEC-registered digital transfer agent, but the release does not say whether either will handle the Federated Hermes products (source 1).
In Le Coin's view, until a fund is named, this is a distribution plan with a target quarter.
Sources
- Prometheum Inc. and Federated Hermes, Inc., "Prometheum and Federated Hermes Announce Strategic Partnership to Issue Tokenized Securities Funds," press release via Business Wire, Oct. 13, 2026, accessed 5:12 p.m. ET.
Holding the Corner.
Not financial advice.