Templeton Russia & East European Fund (TRF) Inactive
Filed: 15 Jul 13, 12:00am
FRANKLIN TEMPLETON INVESTMENTS
ONE FRANKLIN PARKWAY
SAN MATEO, CA 94403-1906
July 15, 2013
VIA EDGAR
Ms. Christina DiAngelo
Mr. Jeffrey Long
U.S. Securities and Exchange Commission
Division of Investment Management
Office of Disclosure and Review
100 F Street, NE
Washington, DC 20549-8626
Subject: Franklin, Templeton, and Mutual Series Funds (the “Funds”)
(as listed on the attached Appendix)
Dear Ms. DiAngelo and Mr. Long:
On behalf of the above-referenced Funds, the following are the responses to the Staff’s comments conveyed telephonically on June 4, 2013 with regard to the various filings made by the Funds with the U.S. Securities and Exchange Commission (“SEC”) on Forms N-CSR, N-SAR and N-PX, as well as corresponding disclosures made in their prospectuses filed as part of their Registration Statements on Form N-1A. References made to the Funds’ shareholder reports are referring to those shareholder reports reviewed by the SEC Staff, as listed on the Appendix. Each comment is summarized below, followed by the Funds’ response to the comment.
A. Comments to Series/Class Information:
1. Comment: Please update the series and class information on the EDGAR company database of the Funds in the following table to include ticker symbols for the following classes (this list may not be all-inclusive).[1]
Registrant | Fund | Class |
Franklin Tax Free Trust | Franklin Maryland Tax-Free Income Fund | Advisor Class |
Franklin Tax Free Trust | Franklin Massachusetts Tax-Free Income Fund | Advisor Class |
Franklin Tax Free Trust | Franklin Double Tax-Free Income Fund | Advisor Class |
Franklin Strategic Series | Franklin Biotechnology Discovery Fund | Advisor Class |
Franklin Strategic Series | Franklin Focused Core Equity Fund | C, R and Advisor |
Franklin Mutual Series Funds | Mutual Beacon Fund | Class R |
Franklin Mutual Series Funds | Mutual European Fund | Class R |
Franklin Mutual Series Funds | Mutual Quest Fund | Class R |
Franklin Mutual Series Funds | Mutual International Fund | All classes |
Franklin Templeton Fund Allocator Series | Franklin Templeton Corefolio Allocation Fund | Class R and Advisor |
Franklin California Tax-Free Trust | Franklin California Insured Tax-Free Income Fund | Advisor Class |
Franklin Templeton Fund Allocator Series | Franklin Templeton Multi-Asset Real Return Fund | All classes |
Franklin Investors Securities Trust | Franklin Balanced Fund | Class R, R6 and Advisor |
Franklin Investors Securities Trust | Franklin Low Duration Total Return Fund | Class C, R6 and Advisor |
Franklin Investors Securities Trust | Franklin Equity Income Fund | Class R6 and Advisor |
Franklin Templeton Money Fund Trust | Franklin Templeton Money Fund | Class A |
[1] The Staff referenced Rule 313 of Regulation S-T concerning the requirements to keep information regarding existing and new series and/or classes current, including series and/or class (contract) names, ticker symbols and status (active or inactive).
# 1230712 v. 2
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 2
Response: The series/class information of the above-referenced Registrants has been updated as applicable.
2. Comment: Please correct the ticker symbol for Advisor Class shares of the Franklin Adjustable U.S. Government Securities Fund. The March 1, 2013 prospectus lists the ticker as “FAUZX” while the series and class information in Edgar lists the ticker symbol as “FAGZX”.
Response: The discrepancy has been corrected.
3. Comment: The Money Market Portfolios currently consists of one active series, The Money Market Portfolio. The series and class information in Edgar lists another series as being active. Please update the series and class information to remove this series.
Response: The series/class information has been updated as of June 13, 2013.
4. Comment: The series and class information for Franklin Floating Rate Master Trust lists two active classes; however, this Fund has only one active class. Please update the series and class information.
Response: The series/class information has been updated as of June 13, 2013.
B. Comments Regarding Funds’ Filing History:
1. Comment: Please note that when amended filings are made and those filings require certifications, we expect the certifications to be updated to the date of the amended filing, even if the amended filing is made one day later than the original filing. For example, with respect to Franklin Universal Trust, the initial N-CSR was filed on October 29, 2010 and an amended filing was made on November 2, 2010; however, the certifications in the amended filing contained a date of October 28, 2010, the date of the original certifications.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 3
Response: The Funds will provide updated certifications as necessary going forward.
2. Comment: With respect to Funds that have filed a Form N-17f-2, verification of securities by an independent public accountant and the filing of the certificate of such accountant is required at least three times during each fiscal year. It appears that such Funds that filed a Form N-17f-2 only filed one certificate during the 2009-2010 fiscal year, rather than the required three. Please explain.
Response: The 17f-2 counts were properly performed as required; however the Forms N-17f-2 were inadvertently not filed for the 2009-2010 fiscal year. Improved procedures were developed and there have been no missed filings since. The omitted N-17f-2 filings for 2010 were filed in June 2013.
C. Comments to Form N-SAR:
1. Comment: The Accountants Report on Internal Control attached as an exhibit to the Form NSAR-B of Franklin Templeton Fund Allocator Series filed on July 30, 2012 appears to be incorrectly dated. The report is dated June 19, 2012 while the audit opinion is dated July 19, 2012. File an amended NSAR-B to correct this discrepancy.
Response: The requested amended NSAR-B was filed on June 25, 2013.
D. Comments to Form N-CSR:
1. Comment: The Form N-CSR filed for Institutional Fiduciary Trust filed on August 31, 2012 does not appear complete. Page 1 appears to be missing from the filing.
Response: An amendment to the N-CSR to include Page 1 of the filing was filed June 20, 2013.
2. Comment: With respect to the Franklin Templeton closed-end Funds, please confirm that the information required by Item 8(a)(2)(iii) of Form N-CSR, which relates to information required regarding other accounts managed by portfolio managers of the Funds for which performance-based advisory fees are charged, has been included.
Response: The information required by Item 8(a)(2)(iii) of Form N-CSR was included in the filing for Franklin Mutual Recovery Fund (“FMRF”) (see performance fee footnote). Performance fee disclosure is not required for the following closed-end funds because the portfolio managers for such Funds do not manage other accounts for which a performance fee is charged: Templeton Russia & East European Fund, Templeton Emerging Markets Income Fund, Franklin Universal Trust, Templeton Emerging Markets Fund, Templeton Global Income Fund, and Templeton Dragon Fund. However, the portfolio managers for Franklin Templeton Limited Duration Income Trust, do manage another account(s) for which a performance fee is charge and the required information was inadvertently omitted. We will be filing an amended N-CSR for Franklin Templeton Limited Duration Income Trust.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 4
3. Comment: With respect to the FMRF, please include the information required by Item 9 of Form N-CSR relating to purchase made by or on behalf of the Fund or any “affiliated purchaser” of shares or other units of any class of the Fund’s equity securities that is registered by the Fund. FMRF appears to have repurchased its shares, but a response to Item 9 was not included in its N-CSR.
Response: A registered closed-end investment company does not have to comply with Item 9 of Form N-CSR where the company, like FMRF, (1) relies on Rule 23c-3 of the Investment Company Act of 1940, in making periodic repurchases of its shares; and (2) does not have any class of its shares of common stock or beneficial interest registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). By its terms, Form N-CSR Item 9 requires reporting of the Item 9 required information by a registrant that is a closed-end management investment company “with respect to any purchase made by or on behalf of the registrant or any ‘affiliated purchaser,’ as defined in Rule 10b-18(a)(3) under the Exchange Act [citation omitted], of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act.”
Because FMRF’s securities are not registered for sale on any securities exchange (see Section 12(a)) and such securities are excluded from the other registration requirements of Section 12(g) of the Exchange Act by virtue of FMRF being a registered investment company, FMRF is not required to respond to Item 9 of Form N-CSR. In addition, Rule 23c-3(b)(2)(ii) already requires similar information to be included in FMRF’s Annual Report itself (see “The Fund’s Repurchase Offers” section of the Annual Report).
4. Comment: In the Management’s Discussion of Fund Performance (“MDFP”) section of the Funds’ shareholder reports, consider including the return of the Funds’ benchmarks in the average annual total return table. While this is not a requirement, the Staff views this disclosure as a best practice.
Response: We have considered your suggestion. Our practice, however, is to provide the return of the benchmark(s) for the period under review in the first paragraph of the MDFP alongside the fund’s return for a direct comparison upfront. To add benchmark returns in the performance table seems redundant, and in the case of some funds with as many as four benchmarks could be overly complicated for a shareholder to read.
5. Comment: With respect to the MDFP section of the Funds’ shareholder reports, some Funds do not include a line item reflecting the value of a $10,000 investment in the Fund in the average annual total returns performance table (for example, see Franklin U.S. Government Securities Fund). Please be consistent in that disclosure and ensure that all Funds include the disclosure in their average annual total returns performance table.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 5
Response: We consistently include a line item reflecting value of a $10,000 investment in the fund for those funds seeking capital appreciation (or capital appreciation and income) because we believe shareholders of such funds would be interested in the growth of their investment. We consistently do not include such a line item for funds seeking only income because growth of capital is not as important a consideration for those funds’ shareholders. In line with this approach, the shareholder report for Franklin U.S. Government Securities Fund (which seeks income) does not include the value of $10,000 for an investment in the fund whereas the other funds of the Trust, which are included in the Trust report, have capital appreciation as a goal.
6. Comment: With respect to the Franklin Federal Tax-Free Income Fund, in the credit quality chart in the MDFP section of the Fund’s annual report, the following footnote appears:
Standard & Poor’s (S&P) is used as the primary independent rating agency source. Moody’s is secondary, and Fitch, if available, is used for securities not rated by Moody’s or S&P. The ratings are an indication of an issuer’s creditworthiness, with long-term ratings typically ranging from AAA (highest) to Below Investment Grade (lowest; includes ratings BB to D). This methodology differs from that used in Fund marketing materials. (emphasis added).
Please explain why the methodology used by the Fund in the credit quality chart for the annual report is different from the methodology used for the Fund’s marketing materials. Please also describe the methodology used for the Fund’s marketing materials and explained which methodology is used for compliance with the Fund’s investment policies.
Response: Historically, the Franklin tax-free income funds have provided information regarding portfolio credit quality in both marketing materials and shareholder reports using, for each bond that has a rating assigned to it by more than one NRSRO, the highest rating. The Funds’ portfolio managers believe that this approach is commonly used in the industry, is the most meaningful to investors and is more efficient given the presence of three NRSROs in the municipal bond market. However, in 2004, the SEC began requiring that mutual funds that choose to provide a portfolio breakdown by credit quality only use one NRSRO for all portfolio holdings in a fund. Therefore, the Franklin tax-free income funds conformed their presentation in their shareholder reports to comply with the new requirements of Item 27(d)(2) of the Form N-1A, but chose to retain their historical presentation in their marketing materials because of their belief that it is the more meaningful approach. The Funds believe the disclosure in the shareholder reports and marketing materials describes this difference. In addition, such Funds generally use the highest rating for each bond, consistent with the approach used in the marketing materials and as disclosed in their prospectuses, for purposes of portfolio compliance.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 6
7. Comment: With respect to the MDFP section of the Funds’ shareholder reports, in light of the SEC’s position that the MDFP should discuss a fund’s use of derivative instruments if the fund was materially impacted by the use of such derivative instruments, as set forth in the letter from the SEC Staff to the Investment Company Institute regarding derivatives-related disclosures in July 2010, please describe the Funds’ materiality threshold and why certain funds (such as Franklin High Income Fund) do not have a discussion of the Fund’s derivative usage in its MDFP.
Response: There is no single across-the-board standard of materiality. Each fund’s report is considered individually with respect to derivatives and is based on the actual use of derivatives during the reporting period, which use varies by investment strategy, overall portfolio holdings, and types of derivatives. Therefore, materiality can vary from portfolio to portfolio and period to period, and the MDFP included in the shareholder report reflects the investment manager’s assessment of whether the use of derivatives materially affected fund performance for that period. In the case of Franklin High Income Fund, it appears the actual use of derivatives during the reporting period was a de minimis part of the portfolio, and the manager did not view the impact as material to the overall performance of the fund. We continue to monitor disclosure of derivative use as it applies to MDFP disclosures.
8. Comment: With respect to the Franklin Floating Rate Master Trust’s annual report, the statement required by Item 27(b)(7)(ii)(B) of Form N-1A to the effect that past performance does not predict future performance and that the graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares was not included in the report.
Response: Because the only shareholder of the fund was an affiliated offshore entity, we did not include the statements. We will include them going forward.
9. Comment: With respect to the Templeton Emerging Markets Income Fund, the Fund’s most recent annual report states:
The Fund’s Board of Trustees has authorized the Fund to increase use of currency forward contracts for hedging and investment purposes so that the Fund may maintain a significant exposure to these instruments when the investment manager believes it is advisable to do so.
Please explain what the term “significant” means as used in the disclosure above. Also, please state whether you believe that the term should be defined for shareholders.
Response: The Fund believes that the current disclosure regarding the Fund’s anticipated use of currency forwards appropriately describes the Fund’s intended use thereof. Any fund’s use of derivatives may be measured in a variety of ways depending upon a number of factors, including the particular type of derivative and how the derivative instrument is traded or settled, e.g., contractual value, notional value or market value. Therefore, the Fund believes that disclosing percentage limitations may not be the most appropriate method of conveying to investors a fund’s proposed or anticipated use of particular derivatives or the risks related thereto. The Fund does believe that the word “significant,” given its common understanding (“noteworthy” or “important”), explains that the Fund’s use of currency forwards may result in “large” or “major” exposure.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 7
10. Comment: With respect to Funds that invest in pay-in-kind securities, in the schedule of investments for the Funds, separate the pay-in-kind line item into two line items, one which reflects the component of the security that is cash and the other that reflects the component of the security that is pay-in-kind.
Response: For pay-in-kind (PIK) securities, we include a footnote within the Statement of Investments (SOI) to indicate that income may be received in additional securities and/or cash. If the income from PIK securities exceeds 5% of total interest income for the reporting period, we will disclose the cash versus PIK rates for each PIK security within the SOI.
11. Comment: For the Franklin Templeton Founding Funds Allocation Fund, which invests significantly (approximately 1/3 of its assets) in each of three different funds, please describe how a shareholder can gain access to the underlying funds’ financial statements. For example, are the underlying funds’ financial statements sent to shareholders of the Franklin Templeton Founding Funds Allocation Fund, or are shareholders informed of how to receive the financial statements of the underlying funds?
Response: Shareholders of the Franklin Templeton Founding Funds Allocation Fund do not receive financial statements of the underlying funds. Effective with the June 2013 reports, the Franklin Templeton Founding Funds Allocation Fund as well as for the other fund-of-funds, we will disclose within the shareholder report of the top tier Fund as to how shareholders can obtain financial statements of the underlying funds. However, if a fund’s only investment in an underlying fund is its investment in the Money Market Portfolio (Sweep), we would not make this disclosure.
12. Comment: With respect to the Franklin Pelagos Commodities Strategy Fund, please provide an enhanced description of excess return swap contracts to provide a more fulsome description of such investments to shareholders.
Response: We will review and consider a more enhanced description of excess return swaps going forward.
13. Comment: With respect to the Franklin High Yield Tax-Free Income Fund, the value of the Fund’s holding, the Sabine River Authority PCR, Series A, B and C, is very low compared to the principal amount. Please explain the difference in value versus principal amount of these holdings and if the securities are in default.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 8
Response: Sabine River Authority is backed by Texas Competitive Electric Holdings (TCEH), which was formed during a leveraged buyout in late 2008. TCEH is believed to have ample liquidity through 2014, and a technical default is unlikely before late 2013 at the earliest. The securities are not in default but the market was pricing in a high likelihood of a default.
14. Comment: With respect to the Franklin Templeton Emerging Market Debt Opportunities Fund’s annual report to shareholders, three securities included in the Fund’s statement of investments were past their maturity dates. Please provide additional information to the Staff regarding these securities.
Response: The securities are past their maturity dates and have been flagged as defaulted. Our procedures are to keep defaulted securities on the books and reflect them in our Statement of Investments while efforts are made to recover past due amounts. Interest is not accrued on defaulted securities and the securities are held at estimated recoverable value as disclosed in our Notes to Financial Statements.
15. Comment: In the financial highlights of the Franklin Rising Dividends Fund, footnote “c” refers to net investment income including a return of capital. Please provide more detail to the Staff regarding this footnote.
Response: In fiscal year 2007, the Franklin Rising Dividends Fund received a special cash distribution of $25 per share from Alberto-Culver as part of a broader transaction which included a spin-off of a new company, Sally Beauty (the “Company”). Per the Company filings with the SEC, the special cash distribution was noted as being a dividend to the extent the Company had accumulated earnings and profits as of its 2007 fiscal year end, hence the Fund recorded the distribution as dividend income. Due to the significant impact of this transaction on net investment income (“NII”), the Fund’s 2007 fiscal year end financial highlights were footnoted (see footnote d) to reflect the impact of the transaction.
In fiscal year 2009, the Fund became aware, after final taxability of the 2006 special cash distribution had been determined, that a portion of the dividend had been reclassified by the Company as a return of capital (“ROC”). Due to the significant impact of this transaction on NII, the Fund’s 2009 fiscal year end financial highlights were footnoted (see footnote c) to reflect the impact of the transaction.
16. Comment: Pursuant to Section 6.04(12)(b)(1) of Regulation S-X, to the extent that there are any payables to Trustees as of the end of the period, such payables should be set forth separately in the statement of assets and liabilities.
Response: Generally, the Funds do not have a payable to Trustees outstanding as of the end of the period since the amounts are paid prior to period-end. To the extent Funds do have a payable to Trustees outstanding as of the end of the period, effective with the July 2013 reports, we will present this payable separately in the statement of assets and liabilities.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 9
17. Comment: With respect to the Emerging Markets Series of Templeton Institutional Funds, the statement of assets and liabilities reflects that accrued expenses for professional fees are greater than the actual expense. Please explain this discrepancy.
Response: Professional fees are comprised of both audit and legal fees. The payable is accurate and reflects an over accrual of legal fees from prior year that was adjusted in the current year.
18. Comment: For the Franklin Universal Trust, note 3 to the financial statements relating to the Fund’s issuance of senior fixed rate notes states: “See Note 10 regarding fair value measurements for additional information about fair value hierarchy and Level 3 inputs.” Note 10, however, does not contain any additional information regarding the Fund’s senior fixed rate notes.
Response: The reference to Note 10 regarding fair value measurements is to provide the reader with information to understand the different levels in the fair value hierarchy. We do not include any information on the senior fixed rate notes in the fair value table, as the note is not carried at fair value.
19. Comment: Pursuant to Article 6.04 of Regulation S-X, to the extent that there are any related party payables that are consolidated together in the statement of assets and liabilities, the Staff would expect that such related party payables would be broken-out in the notes to the financial statements. However, the applicable Funds’ shareholder reports do not appear to provide the broken-out information.
Response: Effective with the July 2013 reports, we will ensure that any related party payables (management fee payable, administrative fee payable, distribution fee payable, and transfer agent fee payable) are presented separately in the statement of assets and liabilities instead of being combined.
20. Comment: With respect to The Money Market Portfolio, Institutional Fiduciary Trust, Franklin Money Fund and Franklin Templeton Money Fund, please confirm that the top tier funds are not taxed as partnerships. In addition, please confirm the accounting treatment used for the feeder funds – it appears that with respect to the financial highlights the Funds are using master-feeder accounting, but the accounting method throughout the financial statements may not be consistent. Please confirm that the use of the accounting method for master-feeder arrangements is used consistently throughout.
Response: Neither the master fund nor the feeder funds are taxed as partnerships and, as noted in the respective funds’ notes to financial statements, all funds in question are regulated investment companies subject to the provisions of the Internal Revenue Code. Franklin Templeton has adopted a consistent accounting treatment throughout the financial statements. Any NII generated by the master fund is passed to the feeder funds through a daily distribution. The feeder funds reflect the expenses of the top tier fund in the feeder fund’s financial highlights. Additionally, each feeder fund includes the complete set of the master fund’s financial statements and accompanying footnotes for added transparency.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 10
21. Comment: With respect to Foreign Equity Series of TIF, please provide an explanation for why the Fund paid Federal income taxes (as noted in its statement of operations), given the Fund’s distribution policy.
Response: As a general policy, it is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. However, there was a specific circumstance in fiscal year 2012 where the Fund identified a PFIC subsequent to the filing of the Fund’s federal tax returns for the prior period, resulting in the recognition of income on which the Fund incurred federal income taxes of $400,470 as noted in the Statement of Operations and accompanying notes to the financials.
22. Comment: With respect to the disclosure in the notes to the financial statements for the Funds, please provide a description of the materiality thresholds as they relate to the Funds’ fair valuation disclosures (i.e., what is “significant”). Also, please state what the materiality threshold is for the level three fair valued securities listed in the notes to the financial statements under “Other” for the Mutual Global Discovery Fund.
Response: The three tier approach to assessing the materiality of the Fund’s fair valuation disclosures is as follows: 1) a reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are Level 3 investments in total greater than or equal to 1% of net assets at the end of the reporting period; 2) the quantitative information regarding the unobservable inputs is presented when there are Level 3 investments individually greater than or equal to 0.10% of net assets; and 3) a significant change in the fair value and/or net assets due to a reasonable change in an unobservable input is (a) greater than or equal to 5% of the investments fair value and/or (b) greater than or equal 0.10% of net assets.
The securities listed under “Other” include fair value investments that are less than 0.10% of net assets.
23. Comment: With respect to those Funds that have tiered management fee structures, consider including the effective fee rate paid for the period (both gross and net of fee waivers and expense reimbursements) in the notes to the financial statements as a best practice.
Response: Going forward, for Funds that have tiered management fee structures, we will consider disclosing the effective fee rate gross and net of fee waivers and expense reimbursements in the notes to the financial statements.
24. Comment: Please state whether the securities lending agent for the Funds is a related party to the Funds and, if so, include information relating to the fees retained by the securities lending agent. If the securities lending agent is not a related party to the Funds, consider adding information relating to the fees retained by the securities lending agent as a best practice.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 11
Response: The Funds participate in securities lending program using four lending agents that are not related parties to the Funds. Given that the lending agents are not related to the Funds and that we separately disclose securities lending income on the Statement of Operations, we believe that adding information relating to the fees retained by the securities lending agent does not provide valued-added information to the investors. Our current disclosure is consistent with other fund firms that engage in securities lending using a lending agent that is not a related party.
25. Comment: With respect to those Funds that invest in the Money Market Portfolio of Institutional Fiduciary Trust as part of the cash sweep, describe how the investment management fee waiver is monitored to ensure the right amount is being waived per Fund. Also, please describe how this waiver is reflected in the statements of operations of the Funds, as there appears to be a difference between how the waiver is handled in the statements of operations and in the prospectus fee tables. The Staff believes that the statement of operations should match the fee table.
Response: The investment in the Money Market Portfolio (Sweep) by each Fund is tracked daily. At month-end, the average holdings of each investing Fund are used to determine how much of the management fees are reduced. The monthly fee reduction equals the investing Fund’s average investment into the Sweep over the course of the month, multiplied by the lesser of the Sweep’s effective management fee rate or the investing Fund’s effective management fee rate. In other words, an investing Fund will not have more fees reduced than it is being charged.
Currently, the management fee waiver as it relates to the Funds’ investment in the Sweep is not reflected in the “Expenses waived/paid by affiliates” line item on the Statement of Operations (SOP) since this waiver amount is presented net of the “management fees” line item on the SOP. We will continue to review and consider how best to address the difference between the SOP and the fee table.
26. Comment: With respect to those Funds that are participants in the special servicing arrangements with the Funds of Funds, please describe how the payment of expenses by the underlying funds pursuant to the special servicing arrangements is monitored. Also, please describe why the special servicing arrangements would not be presented in the financial statements in the same manner as an expense waiver.
Response: The special servicing agreement (“SSA”) payments are monitored on a monthly basis using an Access database. Expense accruals from the underlying funds (“ULF”) and the amount of fund of funds (“FOF”) investments in the ULFs are loaded in the database and used to calculate how much FOF expenses are borne by each ULF. Estimates are accrued daily based on prior month actuals and true-ups are reflected at each month-end.
In the Statement of Operations, the SSA fees are shown as an expense for the ULFs and as an offset to expenses (credit) for the FOFs. The SSA is further discussed in the Notes to Financial Statements for both the ULF and the FOF. Effective May 1, 2013, the SSA was discontinued.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 12
27. Comment: Templeton Developing Markets Trust and Templeton Foreign Fund appear to have been reimbursed by an affiliated investment manager for certain dollar amounts (e.g., excise tax from prior year). Please provide more detail on the reimbursement and how the amount of the reimbursement was calculated. Also, Chapter 7, paragraph 126 of the Audit Guide provides that certain evaluations should be made on the statement of operations and the statement of investments with respect to these reimbursed amounts. Please provide us with your evaluations/considerations in this regard.
Response: As reflected on the Statement of Operations (SOP), the Templeton Developing Markets Trust incurred excise taxes in the amount of $69,000. A significant portion ($54,652) of that tax was a direct result of an error made by the administrative manager (Franklin Templeton Services, LLC/FTS – an affiliate of the investment manager). Taxable income of $1,366,292 from a fair fund settlement was not identified properly as income and distributed prior to the end of the calendar year. The tax incurred as a result of this undistributed income was $54,652 (4% of $1,366,292). Therefore, the Fund was reimbursed.
As reflected on the 8/31/11 SOP, the Templeton Foreign Fund incurred excise taxes in the amount of $132,869. A portion ($69,200) of that tax was a direct result of an error made by FTS. Net taxable income of $1,730,000 related to the timing of the annual tax basis recognition of income from a limited partnership security was not distributed prior to the end of the calendar year. The tax incurred as a result of this undistributed income was $69,200 (4% of $1,730,000). Therefore, the Fund was reimbursed during the August 31, 2012 FYE.
In line with the requirements under the Audit Guide, the gross amount of the tax incurred as well as the portion of the tax that was reimbursed by an affiliate of the investment manager, are separately stated on the SOP. Additionally, the nature of the reimbursement is disclosed in the Notes to Financial Statements. For the Financial Highlights, the impact to the ratio of expenses to ANA is footnoted (less than 0.01%), and there was no impact to the Total Return.
28. Comment: With respect to Franklin Strategic Series − Franklin Flex Cap Growth Fund and Franklin Small Cap Growth Fund, please provide an explanation as to why the settlement payments received by the Funds were included in capital share transactions and not listed as a separate line item with a specific description.
Response: Our policy is to only list the transaction as a separate line item with a specific description if material, which we consider to be greater than 0.10% of net assets. These amounts did not breach our materiality threshold and therefore the amounts are included in capital shares transactions as described in the note and are not disclosed separately on the Financial Highlights or Statement of Changes.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 13
29. Comment: The financial statements for the Franklin Utilities Fund reflect that the Fund was reimbursed for a trading error. Please provide the Staff with more detail on the trading error.
Response: A mini tender offer on one of the securities (Transcanada) was inadvertently instructed to participate. Cost/price in purchasing back this security in the open market was higher than the tender price. The difference in cost was reimbursed to the Fund by an affiliate of the Fund’s investment manager.
30. Comment: With respect to the Funds that invest in FT Holdings Corp 2 (“Holding Corp.”), usually the financial statements would be titled “consolidated” financial statements. Please explain why the statements are not labeled “consolidated.” Also, consider enhancing the disclosure in the notes to the financial statements to describe the securities held in Holding Corp.
Response: Each Fund's investment in Holding Corp. is less than 1% of total net assets. The threshold to include "Consolidated" in the header was 5%. Effective with June 2013 reporting periods, the threshold was changed to 1%. Going forward, we will consider including the name of the securities held in Holding Corp. in the notes to the financial statements.
31. Comment: With respect to Franklin Real Estate Securities Fund, note 3 to the financial statements states that asset-based sales charge payments under the Class B Rule 12b-1 Plan were temporarily discontinued due to the Fund exceeding the sales charge cap. Please provide more of an explanation for this discontinuation of Class B Rule 12b-1 Plan asset-based sales charge payments.
Response: Conduct Rule 2830 sets forth a sales charge cap applicable to sales of shares of open-end registered investment companies. For all of the F-T Funds that charge asset-based sales charges, the applicable sales charge cap was 6.25% of gross new sales and was calculated on a class-by-class basis.* In December 2007, the first F-T Fund, Franklin Real Estate Securities Fund, hit its Class B sales charge cap**. Since late December 2007, the Real Estate Fund has stopped accruing 75 bp of its 100 bp Class B Rule 12b-1 fees (which represent the asset-based sales charge; the 25 bp service fee continued to be accrued and paid out to financial intermediaries), and any contingent deferred sales charges collected upon redemption of Class B shares were retained by the Franklin Real Estate Securities Fund.
*Effective October 1, 2009, the calculation methodology of the sales charge caps for the F-T Funds’ Class B shares was revised with respect to how exchange transactions are “credited” as new sales to the receiving fund and redemptions to the redeeming fund.
**Effective March 22, 2013, all Class B shares were converted to Class A.
32. Comment: For Franklin Floating Rate Master Trust, pursuant to Item 27(d)(6) of Form N-1A, the disclosure regarding the Board’s annual approval of investment advisory agreement should be included in the Fund’s annual or semi-annual report to shareholders; however, such disclosure has not been included for 2012. Please provide an explanation of why such disclosure was not included.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 14
Response: Because the only shareholder of the fund was an affiliated offshore entity, we did not include the “Board Review of Investment Management Agreement.” We will include it going forward.
E. Comments to Form N-PX:
1. Comment: With respect to Form N-PX filings that cover multiple Funds, for each Fund that has no proxy votes for the reporting period, please provide a list of each such Fund and a brief explanation of why the reporting is not applicable in lieu of disclosing “N/A”.
Response: Attached is a list of funds for the Form N-PX period July 1, 2011 – June 30, 2012 for which our records show the following description: “There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period.” In all cases, the funds are either managed pursuant to a fixed income strategy or are structured as a fund-of-funds. We have noted that in the actual SEC filing, it simply states N/A in the Form N-PX for these funds. Going forward, we will include the complete description quoted above in the Form N-PX filing in order to provide more detail on why our records show no voting activity. (Note: See Exhibit A below)
F. Comments to the Prospectuses and Statements of Additional Information:
1. Comment: Please explain why the expense ratios of the following Funds included in the fee tables in the Funds’ prospectuses do not agree with the expense ratios included in the audited financial highlights:
Franklin Balanced Fund
Franklin Real Return Fund
Franklin Total Return Fund
Franklin Rising Dividends Fund
Franklin Focused Core Equity Fund
Franklin Biotechnology Discovery Fund
Franklin Strategic Income Fund
Mutual International Fund
Global Equity Series
Foreign Smaller Company Series
Franklin High Income Trust
Franklin Templeton Multi-Asset Real Return Fund
Franklin Templeton Money Fund
Response:
Real Return Fund Total Return Fund Rising Dividends Fund Biotechnology Discovery Fund Strategic Income Fund High Income Trust | An explanation for the difference in the expense ratios between the Prospectus (Pro) and the audited financial highlights (FiHi) is included in the Pro as a footnote to the Annual Fund Operating Expenses table. Total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights, which reflect the operating expenses of the Fund and do not include acquired fund fees and expenses. |
Global Equity Series Foreign Smaller Company Series | The gross expense ratios agree between the Pro and the FiHi. However, the net expense ratios differ due to the elimination of the contractual fee waiver agreement, which was eliminated effective with the new Pro (May 1, 2013). |
Balanced Fund | The expense ratios differ due to a combination of the two explanations above – 1) acquired fund fees and expenses, and 2) elimination of the contractual fee waiver agreement (effective March 1, 2013). |
Mutual International Fund | The expense ratios agree between the Pro and the FiHi. |
FT Money Fund | The fund has both contractual and voluntary fee waivers. Voluntary waivers are not included in the Pro expense table. |
Focused Core Equity Fund | The expense ratios differ due to 1) acquired fund fees and expenses, which impacted all share classes and 2) share classes A and C differ due to 12b-1 fees, which are reflected at the contractual rates in the Pro, and at the actual rates in the FiHi. |
FT Multi-Asset Real Return Fund | An explanation for the difference in the expense ratios between the Pro and FiHi is included in the Pro as footnotes to the Expense table, as follows: 1. Class A, Class C and Class R distribution and service fees have been restated to reflect the maximum annual contractual rate for the current fiscal year. Consequently the total annual Fund operating expenses differ from the ratio of expenses to net assets shown in the Financial Highlights. 2. Other expenses of the Fund have been restated to exclude non-recurring prior period expenses. If such expenses were included in the table above, the amounts stated would have been greater. 3. Total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights, which reflect the operating expenses of the Fund and do not include acquired fund fees and expenses.
|
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 15
2. Comment: In the December 1, 2012 prospectus for the Franklin International Growth Fund, the fee table shows Class A Distribution and Service Fees as 0.34%. The notes to the July 31, 2012 financial statements say that the Board of Trustee has set the current rate at 0.30% per year for Class A shares until further notice and approval by the Board. Please explain how these rates can be different.
Response: Consistent with other Funds, 12b-1 payments by the Fund are monitored for compliance with plan limitations over an annual period beginning on February 1 and running through January 31. The 12b-1 fee as it appears in the fee table may differ from the maximum amount measured on a fiscal year basis as a result of accrual adjustments that lead to timing differences. 12b-1 fees for the Fund did not exceed the maximum allowable amount under the Fund’s Rule 12b-1 plan, as set by the Fund’s Board, over the measurement period.
3. Comment: With respect to the Franklin Biotechnology Discovery Fund, the portfolio turnover rate for the Fund was approximately 41% in 2010, 235% in 2011 and 46% in 2012. Pursuant to Item 16(e) of Form N-1A, an explanation for the significant variation in the Fund’s portfolio turnover rates over the two most recently completed fiscal years should be included in the Fund’s registration statement.
Response: As discussed in greater length in the Prospectus and SAI, portfolio turnover is affected by a variety of factors, within and outside the control of the Fund and its investment manager. With respect to the Franklin Biotechnology Discovery Fund, the significant variation in the portfolio turnover arose from planned portfolio transactions related to tax considerations. Disclosure will be added for the particular circumstances of the change in portfolio turnover percentage.
4. Comment: With respect to the prospectus and marketing disclosure of after-tax returns, please confirm that the new 3.8% Medicare tax on investment income is used in the after-tax return calculations for the Funds.
Response: Yes, our system was updated in January 2013 to include the 3.8% Medicare Tax.
5. Comment: With respect to the Franklin Tax-Free Connecticut Income Fund, the Fund’s annual report states that it invests 22.2% of its assets in Puerto Rico securities. Due to the significance of the Fund’s investment in Puerto Rico, please describe why the Fund does not have prospectus strategy and risk disclosure indicating that investments in Puerto Rico is a principal investment strategy and risk. Also, confirm whether the Fund will discuss the impact of the downgrade of Puerto Rican securities in its prospectus.
Response: The Franklin Tax-Free Connecticut Income Fund’s prospectus dated July 1, 2012 includes strategy disclosure that states that the Fund may invest in U.S. territories up to 35% of its net assets and risk disclosure that states that “events in any of the territories where the Fund is invested may affect the Fund’s investments and its performance.”
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page 16
As of May 31, 2013, the Franklin Tax-Free Connecticut Income Fund’s exposure to Puerto Rican municipal securities had decreased to 12%. However, in connection with the Fund’s 2013 annual update to its prospectus and statement of additional information, the Franklin Tax-Free Connecticut Income Fund’s prospectus is being updated to include strategy and risk disclosure that specifically mentions Puerto Rico. Additionally, the following specific discussion regarding the impact of the downgrade of Puerto Rico securities on the Fund is being included:
Certain municipal issuers in Puerto Rico have recently experienced financial difficulties. On December 13, 2012, Moody’s downgraded the general obligation rating of Puerto Rico to Baa3 with a negative outlook. On March 13, 2013, S&P downgraded Puerto Rico’s general obligation debt to BBB-, with a negative outlook, and Fitch followed with a March 20, 2013 downgrade to BBB- with a negative outlook. These rating agencies have subsequently downgraded other Puerto Rican municipal issuers, including bonds guaranteed by the commonwealth, with the possibility of additional downgrades if negative trends continue. Downgrades could create additional strain on a commonwealth already facing existing economic stagnation and fiscal imbalances, including budget deficits and pension funding shortages. Puerto Rican financial difficulties could potentially lead to less liquidity for its bonds, wider spreads, and greater risk of default for Puerto Rican municipal securities, and consequently may affect the Fund’s investments and its performance.
We believe that we have responded fully to each of the SEC’s Staff comments as set forth above. However, should you have any further questions or require any further information, please do not hesitate to contact the undersigned at 650-312-5651, or, in her/his absence, Laura Fergerson at 916-463- 5030.
In connection with the Funds’ responses to the SEC Staff’s comments to the Funds’ filings noted in this letter, as requested by the Staff, each Fund acknowledges that: (i) the Fund is responsible for the adequacy of the disclosure in the Fund’s filings; (ii) Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the SEC from taking any action with respect to the filings; and (iii) the Fund may not assert Staff comments as a defense in any proceeding initiated by the SEC under the federal securities laws of the United States.
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page17
Very truly yours,
/s/ Karen L. Skidmore
Karen L. Skidmore,
Vice President
On behalf of the Funds listed in the attached Appendix
Ms. Christina DiAngelo
Mr. Jeffrey Long
July 15, 2013
Page18
APPENDIX
FUNDS AND FINANCIAL STATEMENTS REVIEWED BY SEC STAFF
February 28, 2012 financial statements:
Franklin Tax Free Trust 811-04149 Filed 4/27/2012
Franklin Alabama Tax-Free Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
Franklin Kentucky Tax-Free Income Fund
Franklin Louisiana Tax-Free Income Fund
Franklin Maryland Tax-Free Income Fund
Franklin Missouri Tax-Free Income Fund
Franklin North Carolina Tax-Free Income Fund
Franklin Virginia Tax-Free Income Fund
Franklin Arizona Tax-Free Income Fund
Franklin Colorado Tax-Free Income Fund
Franklin Connecticut Tax-Free Income Fund
Franklin Double Tax-Free Income Fund
Franklin Fed Intermediate Term Tax-Free Income Fund
Franklin Federal Limited Term Tax Free Income Trust
Franklin High Yield Tax-Free Income Fund
Franklin Insured Tax-Free Income Fund
Franklin Massachusetts Tax-Free Income Fund
Franklin Michigan Tax-Free Income Fund
Franklin Minnesota Tax-Free Income Fund
Franklin New Jersey Tax-Free Income Fund
Franklin Ohio Tax-Free Income Fund
Franklin Oregon Tax-Free Income Fund
Franklin Pennsylvania Tax-Free Income Fund
March 31, 2012 financial statements:
Franklin California Tax Free Income Fund 811-02790 Filed 5/30/2012
Franklin California Tax Free Income Fund
Franklin Templeton Limited Duration Income Trust 811-21357 Filed 5/30/2012
Franklin Templeton Limited Duration Income Trust
Franklin Mutual Recovery Fund 811-21306 Filed 5/30/2012
Franklin Mutual Recovery Fund
Templeton Global Investment Trust 811-08226 Filed 5/30/2012
Templeton BRIC Fund
Templeton Asian Growth Fund
Templeton Emerging Markets Small Cap Fund
Templeton Emerging Markets Balanced Fund
Templeton Frontier Markets Fund
Templeton Global Balanced Fund
Templeton Russia & East European Fund 811-08788 Filed 5/30/2012
Templeton Russia & East European Fund
April 30, 2012 financial statements:
Franklin Strategic Series 811-06243 Filed 6/29/2012
Franklin Flex Cap Growth Fund
Franklin Focused Core Equity Fund
Franklin Growth Opportunities Fund
Franklin Small Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Biotechnology Discovery Fund
Franklin Natural Resources Fund
Franklin Strategic Income Fund
Franklin Federal Tax Free Income Fund 811-03395 Filed 6/29/2012
Franklin Federal Tax-Free Income Fund
Franklin Real Estate Securities Trust 811-08034 Filed 6/29/2012
Franklin Real Estate Securities Fund
May 31, 2012 financial statements:
Franklin Municipal Securities Trust 811-06481 Filed 7/30/2012
Franklin California High Yield Municipal Fund
Franklin Tennessee Municipal Bond Fund
Franklin High Income Trust 811-01608 Filed 7/30/2012
Franklin High Income Fund
Franklin Templeton Fund Allocator Series 811-07851 Filed 7/30/2012
Franklin Templeton Multi-Asset Real Return Fund
Franklin New York Tax-Free Income Fund 811-03479 Filed 7/30/2012
Franklin New York Tax-Free Income Fund
Franklin Alternative Strategies Funds 811-22641 Filed 7/30/2012
Franklin Pelagos Commodities Strategy Fund
Franklin Pelagos Managed Futures Strategy Fund
June 30, 2012 financial statements:
A-1
Franklin California Tax-Free Trust 811-04356 Filed 8/31/2012
Franklin California Insured Tax-Free Income Fund
Franklin California Intermediate-Term Tax-Free Income Fund
Franklin California Tax-Exempt Money Fund
Franklin Templeton Money Fund Trust 811-08962 Filed 8/30/2012
Franklin Templeton Money Fund
Institutional Fiduciary Trust 811-04267 Filed 8/31/2012
Money Market Portfolio
Money Market Portfolios 811-07038 Filed 9/4/2012
The Money Market Portfolio
Franklin Money Fund 811-02605 Filed 8/30/2012
Franklin Money Fund
July 31, 2012 financial statements:
Franklin Floating Rate Master Trust 811-09869 Filed 10/2/2012
Franklin Floating Rate Master Series
Franklin Global Trust 811-10157 Filed 10/2/2012
Franklin Global Real Estate Fund
Franklin International Growth Fund
Franklin International Smaller Cap Growth Fund
Franklin Large Cap Equity Fund
Franklin Templeton Emerging Market Debt Opportunities Fund
Franklin Gold and Precious Metals Fund 811-01700 Filed 9/28/2012
Franklin Gold and Precious Metals Fund
Franklin Tax-Exempt Money Fund 811-03193 Filed 9/28/2012
Franklin Tax-Exempt Money Fund
August 31, 2012 financial statements:
Templeton Funds 811-02781 Filed 11/1/2012
Templeton World Fund
Templeton Foreign Fund
Templeton Emerging Markets Income Fund 811-07866 Filed 11/1/2012
Templeton Emerging Markets Income Fund
Franklin Universal Trust 811-05569 Filed 11/1/2012
A-2
Franklin Universal Trust
Templeton China World Fund 811-07876 Filed 11/1/2012
Templeton China World Fund
Templeton Emerging Markets Fund 811-04985 Filed 11/1/2012
Templeton Emerging Markets Fund
Templeton Global Income Fund, Inc. 811-05459 Filed 11/1/2012
Templeton Global Income Fund
Templeton Global Smaller Companies Fund, Inc. 811-03143 Filed 11/1/2012
Templeton Global Smaller Companies Fund
Templeton Growth Fund, Inc. 811-04892 Filed 11/1/2012
Templeton Growth Fund
Templeton Income Trust 811-04706 Filed 11/1/2012
Templeton Global Bond Fund
Templeton Global Total Return Fund
Templeton International Bond Fund
September 30, 2012 financial statements:
Franklin Managed Trust 811-04894 Filed 12/4/2012
Franklin Rising Dividends Fund
Franklin Custodian Funds, Inc. 811-00537 Filed 11/30/2012
Franklin Dynatech Fund
Franklin Growth Fund
Franklin Income Fund
Franklin U.S. Government Securities Fund
Franklin Utilities Fund
Franklin New York Tax-Free Trust 811-04787 Filed 11/30/2012
Franklin New York Intermediate Term Tax-Free Income Fund
Franklin Strategic Mortgage Portfolio 811-07288 Filed 11/28/2012
Franklin Strategic Mortgage Portfolio
October 31, 2012 financial statements:
Franklin Investors Securities Trust 811-04986 Filed 12/31/2012
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
A-3
Franklin Limited Maturity U.S. Government Securities Fund
Franklin Real Return Fund
Franklin Adjustable U.S. Government Securities Fund
Franklin Floating Rate Daily Access Fund
Franklin Low Duration Total Return Fund
Franklin Total Return Fund
Franklin Templeton Global Trust 811-04450 Filed 1/2/2013
Franklin Templeton Hard Currency Fund
Franklin Templeton International Trust 811-06336 Filed 1/2/2013
Franklin India Growth Fund
Franklin Templeton Global Allocation Fund
Templeton Foreign Smaller Companies Fund
Franklin World Perspectives Fund
Franklin Value Investors Trust 811-05878 Filed 1/2/2013
Franklin Allcap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin Microcap Value Fund
Franklin Midcap Value Fund
Franklin Small Cap Value Fund
December 31, 2012 financial statements:
Franklin Mutual Series Funds 811-05387 Filed 3/8/2013
Mutual Quest Fund
Mutual Global Discovery Fund
Mutual Beacon Fund
Mutual Shares Fund
Mutual European Fund
Mutual International Fund
Mutual Financial Services Fund
Templeton Institutional Funds 811-06135 Filed 3/5/2013
Emerging Markets Series
Foreign Equity Series
Foreign Smaller Companies Series
Global Equity Series
Templeton Dragon Fund, Inc. 811-08394 Filed 3/5/2013
Templeton Dragon Fund, Inc.
Franklin Templeton Fund Allocator Series 811-07851 Filed 3/4/2013
Franklin Templeton Corefolio Allocation Fund
A-4
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Conservative Allocation Fund
Franklin Templeton Growth Allocation Fund
Franklin Templeton Moderate Allocation Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund
Templeton Developing Markets Trust 811-06378 Filed 3/5/2013
Templeton Developing Markets Trust
Templeton Global Opportunities Trust 811-05914 Filed 3/5/2013
Templeton Global Opportunities Trust
A-5
Exhibit A
ICA File Number: | Registrant Name: | Fund Name | Reason for no vote |
811-00537 | Franklin Custodian Funds, Inc. | Franklin U.S. Government Securities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-02605 | Franklin Money Fund | Franklin Money Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-02790 | Franklin California Tax-Free Income Fund, Inc. | Franklin California Tax-Free Income Fund, Inc. | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-03193 | Franklin Tax-Exempt Money Fund | Franklin Tax-Exempt Money Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-03395 | Franklin Federal Tax-Free Income Fund | Franklin Federal Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-03479 | Franklin New York Tax-Free Income Fund | Franklin New York Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Alabama Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Arizona Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Colorado Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Connecticut Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Double Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Federal Intermediate-Term Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Federal Limited-Term Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Florida Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Georgia Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin High Yield Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Insured Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Kentucky Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Louisiana Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Maryland Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Massachusetts Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Michigan Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Minnesota Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Missouri Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin New Jersey Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin North Carolina Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Ohio Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Oregon Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Pennsylvania Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04149 | Franklin Tax-Free Trust | Franklin Virginia Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04267 | Institutional Fiduciary Trust | Money Market Portfolio | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04356 | Franklin California Tax-Free Trust | Franklin California Insured Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04356 | Franklin California Tax-Free Trust | Franklin California Intermediate-Term Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04356 | Franklin California Tax-Free Trust | Franklin California Tax-Exempt Money Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04450 | Franklin Templeton Global Trust | Franklin Templeton Hard Currency Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04706 | Templeton Income Trust | Templeton Global Bond Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04706 | Templeton Income Trust | Templeton Global Total Return Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04706 | Templeton Income Trust | Templeton International Bond Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04787 | Franklin New York Tax-Free Trust | Franklin New York Insured Tax-Free Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04787 | Franklin New York Tax-Free Trust | Franklin New York Intermediate-Term Tax-Free Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04986 | Franklin Investors Securities Trust | Franklin Adjustable U.S. Government Securities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04986 | Franklin Investors Securities Trust | Franklin Convertible Securities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04986 | Franklin Investors Securities Trust | Franklin Limited Maturity U.S. Government Securities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-04986 | Franklin Investors Securities Trust | Franklin Low Duration Total Return Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-05459 | Templeton Global Income Fund | Templeton Global Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-05583 | Franklin Templeton Variable Insurance Products Trust | FTVIP - Franklin Templeton VIP Founding Funds Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-05583 | Franklin Templeton Variable Insurance Products Trust | FTVIP - Franklin U.S. Government Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-05583 | Franklin Templeton Variable Insurance Products Trust | FTVIP - Franklin Zero Coupon Fund-2010 | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-05583 | Franklin Templeton Variable Insurance Products Trust | FTVIP Templeton Global Bond Securities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-06481 | Franklin Municipal Securities Trust | Franklin California High Yield Municipal Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-06481 | Franklin Municipal Securities Trust | Franklin Tennessee Municipal Bond Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07038 | The Money Market Portfolios | The Money Market Portfolio (Master) | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07288 | Franklin Strategic Mortgage Portfolio | Franklin Strategic Mortgage Portfolio | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton 2015 Retirement Target Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton 2025 Retirement Target Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton 2035 Retirement Target Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton 2045 Retirement Target Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton Conservative Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton Corefolio Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton Founding Funds Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton Growth Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | Franklin Templeton Moderate Allocation Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07851 | Franklin Templeton Fund Allocator Series | FranklinTempleton Multi-Asset Real Return Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-07866 | Templeton Emerging Markets Income Fund | Templeton Emerging Markets Income Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-08962 | Franklin Templeton Money Fund Trust | Franklin Templeton Money Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-10157 | Franklin Global Trust | Franklin Templeton Emerging Market Debt Opportunities Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-22641 | Franklin Alternative Strategies Funds | Franklin Pelagos Commodities Strategy Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |
811-22641 | Franklin Alternative Strategies Funds | Franklin Pelagos Managed Futures Strategy Fund | There is no proxy voting activity for the fund, as the fund did not hold any votable positions during the reporting period. |