[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23539]
[[Page Unknown]]
[Federal Register: September 23, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20558 ; File No. 812-9114
September 16, 1994.
Notice of Application for Exemption Under the Investment Company
Act of 1940 (``the Act'')
AGENCY: Securities and Exchange Commission (``SEC'').
Applicants: Franklin Gold Fund, Franklin Premier Return Fund, Franklin
Equity Fund, AGE High Income Fund, Inc., Franklin Custodian Funds,
Inc., Franklin Money Fund, Franklin California Tax-Free Income Fund,
Inc., Franklin Federal Money Fund, Franklin Tax-Exempt Money Fund,
Franklin New York Tax-Free Income Fund, Inc., Franklin Federal Tax-Free
Income Fund, Franklin Tax-Free Trust, Franklin California Tax-Free
Trust, Franklin New York Tax-Free Trust, Franklin Investors Securities
Trust, Institutional Fiduciary Trust, Franklin Balance Sheet Investment
Fund, Franklin Tax-Advantaged International Bond Fund, Franklin Tax-
Advantaged U.S. Government Securities Fund, Franklin Tax-Advantaged
High Yield Securities Fund, Franklin Strategic Mortgage Portfolio,
Franklin Municipal Securities Trust, Franklin Managed Trust, Franklin
Strategic Series, Adjustable Rate Securities Portfolios, The Money
Market Portfolios, Midcap Growth Portfolio, The Portfolios Trust,
Franklin International Trust, Franklin Real Estate Securities Trust,
Franklin Valuemark Funds, Franklin Government Securities Trust,
Franklin/Templeton Global Trust, Templeton Growth Fund, Inc., Templeton
Funds, Inc., Templeton Smaller Companies Growth Fund, Inc., Templeton
Income Trust, Templeton Real Estate Securities Funds, Templeton Global
Investment Trust, Templeton Global Opportunities Trust, Templeton
American Trust, Inc., Templeton Institutional Funds, Inc., Templeton
Developing Markets Trust (collectively, the ``Funds''); Franklin
Advisers, Inc. (``Advisers''); Franklin Institutional Services
Corporation (``FISCO'')'; Templeton, Galbraith & Hansberger Litd.,
Templeton Investment Counsel, Inc., Templeton Investment Management
(Hong Kong) Limited, Templeton Investment Management (Singapore) Pte.
Ltd. (collectively, ``Templeton Advisers''); and Franklin/Templeton
Distributors, Inc. (``FTDI'').
Relevant Act Sections: Order requested under section 6(c) of the Act
for an exemption from sections 2(a)(32), 2(a)(35), 22(c), and 22(d) of
the Act and rule 22c-1 thereunder.
Summary of Application: Applicants request an order permitting the
Funds to assess and, under certain circumstances, waive a contingent
deferred sales charge (``CDSC'').
Filing Date: The application was filed on June 21, 1994. Applicants
have agreed to file an amendment, the substance of which is
incorporated herein, during the notice period.
Hearing or Notification of Hearing: An order granting the application
will be issued unless the SEC orders a hearing. Interested persons may
request a hearing by writing to the SEC's Secretary and serving
applicants with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on October 11,
1994, and should be accompanied by proof of service on applicants, in
the form of an affidavit, or for lawyers, a certificate of service.
Hearing requests should state the nature of the writer's interest, the
reason for the request, and the issues contested. Persons may request
notification of a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C.
20549. Applicants, c/o Bruce G. Leto, Esq., Stradley, Ronon, Stevens &
Young, 2600 One Commerce Square, Philadelphia, Pennsylvania 19103.
FOR FURTHER INFORMATION CONTACT:
Bradley W. Paulson, Staff Attorney, at (202) 942-0147 or Robert A.
Robertson, Branch Chief, at (202) 942-0564 (Division of Investment
Management, Office of Investment Company Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application is available for a fee from the
SEC's Public Reference Branch.
Applicants' Representations:
1. Each Fund is an open-end management investment company.
Advisers, FISCO, and Templeton Advisers provide investment advisory
services to the Funds. FTDI is the principal underwriter for each Fund.
Applicants request relief on behalf of themselves and any future
investment company for which Advisers (or any entity controlling,
controlled by, or under common control with Advisers), FISCO (or any
entity controlling, controlled by, or under common control with FISCO),
or the Templeton Advisers (or any entity controlling, controlled by, or
under common control with any of the Templeton Advisers) act as
investment adviser, or for which FTDI (or any entity controlling,
controlled by, or under common control with FTDI) acts as principal
underwriter.
2. Currently, some Funds assess a front-end sales charge, some have
adopted a distribution plan under rule 12b-1 under the Act, and some
assess a front-end sales charge and have a rule 12b-1 distribution
plan. Applicants' proposed CDSC will be implemented in a manner
completely separate and independent from the plans.
3. Under the proposed CDSC arrangement, a CDSC will be imposed on a
redemption if the shares redeemed were purchased in an amount of
$1,000,000 or more, were initially sold without a sales charge, and are
redeemed within 12 months after the end of the calendar month in which
the purchase order was accepted. The CDSC will be assessed against the
net asset value of the shares at the time of purchase or redemption,
whichever is less. Applicants anticipate that the CDSC will be assessed
at a rate of 1%.
4. To determine whether a CDSC is payable, shares (or amounts
representing shares) not subject to a CDSC will be deemed to be
redeemed first. Thereafter, other shares or amounts will be redeemed in
the order purchased. No CDSC will be imposed on redemptions of shares
representing an increase in the value of an account above the net cost
of the investment, which increase is due to increases in the net asset
value per share; shares acquired through reinvestment of income,
dividends, or capital gain distributions; shares acquired by exchange
if the shares that were exchanged would not be assessed a CDSC; and
shares held longer than 12 months after the end of the calendar month
in which the purchase order was accepted.
5. Shares of one Fund may be exchanged for shares of another in
accordance with restrictions relating to the shareholder's state of
residence and the Funds' eligibility requirements or investment
minimums. All exchanges will be effected in accordance with section
11(a) of the Act or rule 11a-3 thereunder.
6. Applicants also request relief to permit each Fund to waive or
reduce the CDSC under certain circumstances. Any waiver or reduction
will comply with the conditions in paragraphs (a) through (d) of rule
22d-1 of the Act.
Applicants' Legal Analysis
Applicants request an exemption under section 6(c) from sections
2(a)(32), 2(a)(35), 22(c), and 22(d) of the Act and rule 22c-1
thereunder to permit the Funds to assess and, under certain
circumstances, waive a CDSC on redemptions of shares. Applicants
believe that the imposition of the CDSC as described above is fair and
in the best interests of all shareholders of the Funds.
Applicants' Condition
Applicants will comply with proposed rule 6c-10, Investment Company
Act Release No. 16619 (Nov. 2, 1988), as currently proposed and as it
may be reproposed, adopted, or amended.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-23539 Filed 9-22-94; 8:45 am]
BILLING CODE 8010-01-M
