EXHIBIT (A)
FRANKLIN TEMPLETON FUNDS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. COVERED OFFICERS AND PURPOSE OF THE CODE
This code of ethics (the "Code")/1/ is for the investment companies within
the complex registered with the United States Securities & Exchange Commission
("SEC") (collectively, "FT Funds") applies to each FT Fund's Principal Executive
Officers, Principal Financial Officer and Principal Accounting Officer (the
"Covered Officers" each of whom are set forth in Exhibit A) for the purpose of
promoting:
o Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional
relationships;
o Full, fair, accurate, timely and understandable disclosure in reports and
documents that a registrant files with, or submits to, the SEC and in other
public communications made by or on behalf of the FT Funds;
o Compliance with applicable laws and governmental rules and regulations;
o The prompt internal reporting of violations of the Code to an appropriate
person or persons identified in the Code; and
o Accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business ethics
and should be sensitive to situations that may give rise to actual as well as
apparent conflicts of interest.
II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF
INTEREST OVERVIEW.
A "conflict of interest" occurs when a Covered Officer's private interest
interferes with the interests of, or his service to, the FT Funds. For example,
a conflict of interest would arise if a Covered Officer, or a member of his
family, receives improper personal benefits as a result of his position with the
FT Funds.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the FT Funds and already are subject to conflict of
interest provisions in the Investment Company Act of 1940 ("Investment Company
Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For
example, Covered Officers may not individually engage in certain transactions
(such as the purchase or sale of securities or other property) with the FT Funds
because of their status as "affiliated persons" of the FT Funds. The FT Funds'
and the investment advisers' compliance programs and procedures are designed to
prevent, or identify and correct, violations of these provisions. This Code does
not, and is not intended to, repeat or replace these programs and procedures,
and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship
between the FT Funds, the investment advisers and the fund administrator of
which the Covered Officers are also officers or employees. As a result, this
Code recognizes that the Covered Officers will, in the normal course of their
duties (whether formally for the FT Funds, for the adviser, the administrator,
or for all three), be involved in establishing policies and implementing
decisions that will have different effects on the adviser, administrator and the
FT Funds. The participation of the Covered Officers in such activities is
inherent in the contractual relationship between the FT Funds, the adviser, and
the administrator and is consistent with the performance by the Covered Officers
of their duties as officers of the FT Funds. Thus, if performed in conformity
with the provisions of the Investment Company Act and the Investment Advisers
Act, such activities will be deemed to have been handled ethically. In addition,
it is recognized by the FT Funds' Boards of Directors ("Boards") that the
Covered Officers may also be officers or employees of one or more other
investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts
of interest are not subject to provisions in the Investment Company Act and the
Investment Advisers Act. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should keep in mind that these
examples are not exhaustive. The overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the FT Funds. Each Covered Officer must:
o Not use his personal influence or personal relationships improperly to
influence investment decisions or financial reporting by the FT Funds
whereby the Covered Officer would benefit personally to the detriment of
the FT Funds;
o Not cause the FT Funds to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the benefit
the FT Funds;
o Not retaliate against any other Covered Officer or any employee of the
Funds or their affiliated persons for reports of potential violations that
are made in good faith;
o Report at least annually the following affiliations or other
relationships:/2/
o all directorships for public companies and all companies that are
required to file reports with the SEC;
o any direct or indirect business relationship with any independent
directors;
o any direct or indirect business relationship with any independent public
accounting firm; and
o any direct or indirect interest in any transaction with any FT Fund that
will benefit the officer (not including benefits derived from the advisory,
sub-advisory, distribution or service agreements with affiliates of
Franklin Resources).
There are some conflict of interest situations that should always be
approved in writing by FT's General Counsel or Deputy General Counsel, if
material. Examples of these include/3/:
o Service as a director on the board of any public or private Company;
o The receipt of any gifts in excess of $100;
o The receipt of any entertainment from any Company with which the FT
Funds has current or prospective business dealings unless such
entertainment is business related, reasonable in cost, appropriate as to
time and place, and not so frequent as to raise any question of
impropriety. Notwithstanding the foregoing, the Covered Officers must
obtain prior approval for any entertainment with a value in excess of
$1000.
o Any ownership interest in, or any consulting or employment relationship
with, any of the FT Fund's service providers, other than an investment
adviser, principal underwriter, administrator or any affiliated person
thereof;
o A direct or indirect financial interest in commissions, transaction
charges or spreads paid by the FT Funds for effecting portfolio
transactions or for selling or redeeming shares other than an interest
arising from the Covered Officer's employment, such as compensation or
equity ownership.
FT's General Counsel or Deputy General Counsel will provide a report to
the FT Funds Audit Committee of any approvals granted at the next regularly
scheduled meeting.
III. DISCLOSURE AND COMPLIANCE
o Each Covered Officer should familiarize himself with the disclosure
requirements generally applicable to the FT Funds;
o Each Covered Officer should not knowingly misrepresent, or cause others
to misrepresent, facts about the FT Funds to others, whether within or
outside the FT Funds, including to the FT Funds' directors and auditors,
and to governmental regulators and self-regulatory organizations;
o Each Covered Officer should, to the extent appropriate within his area of
responsibility, consult with other officers and employees of the FT Funds,
the adviser and the administrator with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports and documents
the FT Funds file with, or submit to, the SEC and in other public
communications made by the FT Funds; and
o It is the responsibility of each Covered Officer to promote compliance
with the standards and restrictions imposed by applicable laws, rules and
regulations.
IV. REPORTING AND ACCOUNTABILITY
Each Covered Officer must:
o Upon adoption of the Code (or thereafter as applicable, upon becoming a
Covered Officer), affirm in writing to the Board that he has received,
read, and understands the Code (see Exhibit B);
o Annually thereafter affirm to the Board that he has complied with the
requirements of the Code; and
o Notify FT's General Counsel or Deputy General Counsel promptly if he
knows of any violation of this Code. Failure to do so is itself is a
violation of this Code.
FT's General Counsel and Deputy General Counsel are responsible for
applying this Code to specific situations in which questions are presented under
it and have the authority to interpret this Code in any particular situation./4/
However, the Independent Directors of the respective fund will consider any
approvals or waivers5 sought by any Chief Executive Officers of the Funds.
The FT Funds will follow these procedures in investigating and enforcing
this Code:
o FT's General Counsel or Deputy General Counsel will take all appropriate
action to investigate any potential violations reported to him;
o If, after such investigation, FT's General Counsel or Deputy General
Counsel believes that no violation has occurred, FT's General Counsel is
not required to take any further action;
o Any matter that FT's General Counsel or Deputy General Counsel believes
is a violation will be reported to the Independent Directors of the
appropriate FT Fund;
o If the Independent Directors concur that a violation has occurred, it
will inform and make a recommendation to the Board of the appropriate
Funds, which will consider appropriate action, which may include review of,
and appropriate modifications to, applicable policies and procedures;
notification to appropriate personnel of the investment adviser or its
board; or a recommendation to dismiss the Covered Officer;
o The Independent Directors will be responsible for granting waivers, as
appropriate; and
o Any changes to or waivers of this Code will, to the extent required, are
disclosed as provided by SEC rules.
V. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the FT Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies there under. Insofar as other
policies or procedures of the FT Funds, the FT Funds' advisers, principal
underwriter, or other service providers govern or purport to govern the behavior
or activities of the Covered Officers who are subject to this Code, they are
superseded by this Code to the extent that they overlap or conflict with the
provisions of this Code. The FT Code of Ethics and Policy Statement On Insider
Trading, adopted by the FT Funds, FT investment advisers and FT Fund's principal
underwriter pursuant to Rule 17j-l under the Investment Company Act and more
detailed policies and procedures set forth in FT's Employee Handbook are
separate requirements applying to the Covered Officers and others, and are not
part of this Code.
VI. AMENDMENTS
Any amendments to this Code, other than amendments to Exhibit A, must be
approved or ratified by a majority vote of the FT Funds' Board including a
majority of independent directors.
VII. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code will
be considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the FT Funds' Board and their counsel.
VIII. INTERNAL USE
The Code is intended solely for the internal use by the FT Funds and does
not constitute an admission, by or on behalf of any FT Funds, as to any fact,
circumstance, or legal conclusion.
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1. Item 2 of Form N-CSR requires a registered management investment company to
disclose annually whether, as of the end of the period covered by the report, it
has adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
officers are employed by the registrant or a third party. If the registrant has
not adopted such a code of ethics, it must explain why it has not done so. The
registrant must also: (1) file with the SEC a copy of the code as an exhibit to
its annual report; (2) post the text of the code on its Internet website and
disclose, in its most recent report on Form N-CSR, its Internet address and the
fact that it has posted the code on its Internet website; or (3) undertake in
its most recent report on Form N-CSR to provide to any person without charge,
upon request, a copy of the code and explain the manner in which such request
may be made. Disclosure is also required of amendments to, or waivers (including
implicit waivers) from, a provision of the code in the registrant's annual
report on Form N-CSR or on its website. If the registrant intends to satisfy the
requirement to disclose amendments and waivers by posting such information on
its website, it will be required to disclose its Internet address and this
intention.
2. Reporting of these affiliations or other relationships may be made separately
by completing the Directors and Officers Questionnaire and returning to FT's
General Counsel or Deputy General Counsel.
3. Any activity or relationship that would present a conflict for a Covered
Officer would likely also present a conflict for the Covered Officer if a member
of the Covered Officer's immediate family engages in such an activity or has
such a relationship. The Cover Person should also obtain written approval by
FT's General Counsel in such situations.
4. FT's General Counsel and Deputy General Counsel are authorized to consult, as
appropriate, with members of the Audit Committee, counsel to the FT Funds and
counsel to the Independent Directors, and are encouraged to do so. 5 Item 2 of
Form N-CSR defines "waiver" as "the approval by the registrant of a material
departure from a provision of the code of ethics" and "implicit waiver," which
must also be disclosed, as "the registrant's failure to take action within a
reasonable period of time regarding a material departure from a provision of the
code of ethics that has been made known to an executive officer" of the
registrant.
EXHIBIT A
Persons Covered by the Franklin Templeton Funds
Code of Ethics
FRANKLIN GROUP OF FUNDS
Edward B. Jamieson, President & Chief Executive Officer - Investment
Management
Charles B. Johnson, President & Chief Executive Officer - Investment
Management
Gregory E. Johnson, President & Chief Executive Officer - Investment
Management
Rupert H. Johnson, Jr. President & Chief Executive Officer - Investment
Management
William J. Lippman, President & Chief Executive Officer - Investment
Management
Christopher Molumphy President & Chief Executive Officer - Investment
Management
Jimmy D. Gambill, Senior Vice President & Chief Executive Officer -
Finance and Administration
Diomedes Loo-Tam Treasurer & Chief Financial Officer
FRANKLIN MUTUAL SERIES FUNDS
David Winters Chairman of the Board, President & Chief Executive
Officer-Investment Management
Jimmy D. Gambill Senior Vice President & Chief Executive Officer-
Finance and Administration
Diomedes Loo-Tam Treasurer & Chief Financial Officer
TEMPLETON GROUP OF FUNDS
Jeffrey A. Everett President & Chief Executive Officer - Investment
Management
Martin L. Flanagan President & Chief Executive Officer - Investment
Management
Mark Mobius President & Chief Executive Officer - Investment
Management
Christopher J. Molumphy President & Chief Executive Officer - Investment
Management
Gary P. Motyl President & Chief Executive Officer - Investment
Management
Donald F. Reed President & Chief Executive Officer - Investment
Management
Jimmy D. Gambill, Senior Vice President & Chief Executive Officer -
Finance and Administration
Diomedes Loo-Tam Treasurer & Chief Financial Officer
EXHIBIT B
ACKNOWLEDGMENT FORM
FRANKLIN TEMPLETON FUNDS CODE OF ETHICS
FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS.
INSTRUCTIONS:
1. Complete all sections of this form.
2. Print the completed form, sign, and date.
3. Submit completed form to FT's General Counsel within 10 days of becoming a
Covered Officer and by January 30th of each subsequent year.
INTER-OFFICE MAIL: Murray Simpson, General Counsel, Legal SM-920/2
TELEPHONE: (650) 312-7331 Fax: (650) 312-2221
E-MAIL: Simpson, Murray (internal address);
mlsimpson@frk.com (external address)
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COVERED OFFICER'S NAME:
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TITLE:
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DEPARTMENT:
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LOCATION:
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CERTIFICATION FOR YEAR ENDING:
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TO: FT GENERAL COUNSEL, LEGAL DEPARTMENT
I hereby acknowledge receipt of a copy of Franklin Templeton Fund's code of
ethics for Principal Executive Officers and Senior Financial Officers (the
"Code") that I have read and understand. I will comply fully with all provisions
of the Code to the extent they apply to me during the period of my employment. I
further understand and acknowledge that any violation of the Code may subject me
to disciplinary action, including termination of employment
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Signature Date signed