As filed with the Securities and Exchange Commission on October 27, 2000.
File Nos.
2-67480
811-3052
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post Effective Amendment No. 25 (X)
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22 (X)
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FRANKLIN FEDERAL MONEY FUND
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(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (650) 312-2000
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MURRAY L. SIMPSON, 777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
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(Name and Address of Agent for Service of Process)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on November 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendments.
The Money Market Portfolios (the Master Fund) has executed this Registration
Statement.
Prospectus
FRANKLIN FEDERAL MONEY FUND
INVESTMENT STRATEGY
INCOME
NOVEMBER 1, 2000
[Insert Franklin Templeton Ben Head]
The SEC has not approved or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
CONTENTS
THE FUND
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INFORMATION ABOUT THE FUND YOU SHOULD KNOW BEFORE INVESTING
[End callout]
2 Goal and Strategies
3 Main Risks
4 Performance
5 Fees and Expenses
6 Management
7 Distributions and Taxes
8 Financial Highlights
YOUR ACCOUNT
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INFORMATION ABOUT ACCOUNT TRANSACTIONS AND SERVICES
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9 Buying Shares
12 Investor Services
15 Selling Shares
18 Account Policies
20 Questions
FOR MORE INFORMATION
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WHERE TO LEARN MORE ABOUT THE FUND
[End callout]
Back Cover
THE FUND
[Insert graphic of bullseye and arrows] GOAL AND STRATEGIES
GOAL The Fund's investment goal is to obtain as high a level of current income
as is consistent with capital preservation and liquidity. The Fund also tries to
maintain a stable $1 share price.
MAIN INVESTMENT STRATEGIES The Fund seeks to achieve its investment goal by
investing all of its assets in shares of The U.S. Government Securities Money
Market Portfolio (Portfolio). The Portfolio has the same investment goal and
substantially similar investment policies as the Fund; it invests only in
marketable obligations that are issued or guaranteed by the U.S. government or
that carry a guarantee that is supported by the full faith and credit of the
U.S. government, repurchase agreements collateralized by these securities, and
stripped securities (which are separate income and principal components of a
debt security). It is the Fund's present policy to limit its investments to U.S.
Treasury bills, notes and bonds (including stripped securities), and repurchase
agreements collateralized only by these securities. A repurchase agreement is an
agreement to buy a security and then to sell the security back after a short
period of time (generally, less than seven days) at a higher price.
PORTFOLIO MATURITY AND QUALITY The Fund maintains a dollar-weighted average
portfolio maturity of 90 days or less and only buys securities:
o with remaining maturities of 397 days or less, and
o that the manager determines present minimal credit risks and are rated in
the top two short-term ratings by U.S. nationally recognized rating
services (or comparable unrated securities).
[Insert graphic of chart with line going up and down] MAIN RISKS
INCOME Since the Fund can only distribute what it earns, the Fund's
distributions to shareholders may decline when interest rates fall. Because the
Fund limits its investments to high-quality, short-term securities, its
portfolio generally will earn lower yields than a portfolio with lower-quality,
longer-term securities subject to more risk.
INTEREST RATE Changes in interest rates can be sudden and unpredictable. Rate
changes occur in response to general economic conditions and also as a result of
actions by the Federal Reserve Board. A reduction in short-term interest rates
will normally result in reduced interest income to the Fund and thus a reduction
in dividends payable top shareholders. An increase in short-term interest rates
will normally have the effect of increasing dividends to shareholders.
More detailed information about the Fund, its policies and risks can be found in
the Fund's Statement of Additional Information (SAI).
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Mutual fund shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not insured by the Federal Deposit Insurance Corporation,
the Federal Reserve Board, or any other agency of the U.S. government. Although
the Fund tries to maintain a $1 share price, it is possible to lose money by
investing in the Fund.
[End callout]
[Insert graphic of a bull and a bear] PERFORMANCE
This bar chart and table show the volatility of the Fund's returns, which is one
indicator of the risks of investing in the Fund. The bar chart shows changes in
the Fund's returns from year to year over the past 10 calendar years. The table
shows the Fund's average annual total returns. Of course, past performance
cannot predict or guarantee future results.
ANNUAL TOTAL RETURNS/1
[Insert bar graph]
7.68% 5.15% 2.84% 2.20% 3.36% 5.06% 4.64% 4.74% 4.71% 4.31
90 91 92 93 94 95 96 97 98 99
YEAR
[Begin callout]
BEST QUARTER:
Q1 '90
1.89%
WORST QUARTER:
Q2 '93
0.53%
[End callout]
AVERAGE ANNUAL TOTAL RETURNS
For the periods ended December 31, 1999
1 YEAR 5 YEARS 10 YEARS
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Franklin Federal Money Fund 4.31% 4.69% 4.46%
1. As of September 30, 2000, the Fund's year-to-date return was 4.01%.
All Fund performance assumes reinvestment of dividends.
To obtain the Fund's current yield information, please call 1-800/DIAL BEN(R).
[Insert graphic of percentage sign] FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum sales charge (load) on purchases None
ANNUAL FUND OPERATING EXPENSES (expenses deducted from fund assets)/1
Management fees/2 .55%
Other expenses for the Fund .22%
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Total annual Fund operating expenses .77%
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1. The annual Fund operating expenses shown and included in the example below
reflect the expenses of both the Fund and The U.S. Government Securities
Money Market Portfolio.
2. For the fiscal year ended June 30, 2000, the manager had agreed in advance to
limit its management fees and to assume as its own expense certain expenses
otherwise payable by the Fund. With this reduction, management fees were .54%
and total annual Fund operating expenses were .76%. The manager may end this
arrangement at any time upon notice to the Fund's Board of Directors.
EXAMPLE
This example can help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds. It assumes:
o You invest $10,000 for the periods shown;
o Your investment has a 5% return each year;
o The Fund's operating expenses remain the same; and
o You sell your shares at the end of the periods shown.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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$79 $246 $428 $954
[Insert graphic of briefcase] MANAGEMENT
Franklin Advisers, Inc. (Advisers), 777 Mariners Island Blvd., San Mateo, CA
94404, is The U.S. Government Securities Money Market Portfolio's investment
manager and the Fund's administrator. Together, Advisers and its affiliates
manage over 236 billion in assets.
The Portfolio pays Advisers a fee for managing the Portfolio's assets. For the
fiscal year ended June 30, 2000, the Fund's share of the Portfolio's management
fees, before any advance waiver, was .15% of the Fund's average daily net
assets. Under an agreement by the manager to limit its fees, the Fund's share
was .14% of its average daily net assets. The manager may end this arrangement
at any time upon notice to the Fund's Board of Directors.
[Insert graphic of dollar
signs and stacks of coins] DISTRIBUTIONS AND TAXES
INCOME DISTRIBUTIONS The Fund typically pays income dividends each day that its
net asset value is calculated. Your account may begin to receive dividends on
the day after we receive your investment and will continue to receive dividends
through the day we receive a request to sell your shares. The amount of these
dividends will vary and there is no guarantee the Fund will pay dividends.
TAX CONSIDERATIONS In general, Fund distributions are taxable to you as ordinary
income. This is true whether you reinvest your distributions in additional Fund
shares or receive them in cash.
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BACKUP WITHHOLDING
By law, the Fund must withhold 31% of your taxable distributions and redemption
proceeds if you do not provide your correct social security or taxpayer
identification number and certify that you are not subject to backup
withholding, or if the IRS instructs the Fund to do so.
[End callout]
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December.
For tax purposes, an exchange of your Fund shares for shares of a different
Franklin Templeton fund is the same as a sale. Because the Fund expects to
maintain a stable $1 share price, you should not have any gain or loss if you
sell your Fund shares.
Fund distributions generally will be subject to state and local taxes. The fund
does not anticipate that any of its distributions will qualify for exemption
from state and local taxes as dividends from interest on U.S. government
securities. Non-U.S. investors may be subject to U.S. withholding and estate
tax. You should consult your tax advisor about the federal, state, local or
foreign tax consequences of your investment in the Fund.
[Insert graphic of a dollar bill] FINANCIAL HIGHLIGHTS
This table presents the Fund's financial performance for the past five years.
This information has been audited by PricewaterhouseCoopers LLP.
YEAR ENDED JUNE 30,
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2000 1999 1998 1997 1996
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PER SHARE DATA ($)
Net asset value,
beginning of year 1.00 1.00 1.00 1.00 1.00
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Net investment income .048 .042 .047 .045 .047
Distributions from net
investment income (.048) (.042) (.047) (.045) (.047)
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Net asset value, end of year 1.00 1.00 1.00 1.00 1.00
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Total return (%) 4.87 4.32 4.85 4.62 4.80
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
($ x 1,000) 147,938 144,387 134,621 121,291 127,659
Ratios to average net
assets: (%)
Expenses/1 .76 .78 .82 .85 .84
Expenses excluding waiver
and payments by affiliate/1 .77 .78 .83 .86 .86
Net investment income 4.74 4.23 4.73 4.54 4.71
1. The expense ratio includes the Fund's share of the Portfolio's allocated
expenses.
YOUR ACCOUNT
[Insert graphic of a paper with lines
and someone writing] BUYING SHARES
[Begin callout]
FRANKLIN TEMPLETON FUNDS include all of the U.S. registered mutual funds of
Franklin Templeton Investments, except Franklin Templeton Variable Insurance
Products Trust and Templeton Capital Accumulator Fund, Inc.
[End callout]
MINIMUM INVESTMENTS
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INITIAL ADDITIONAL
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Regular accounts $1,000 $50
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Automatic investment plans $50 ($25 for $50
an Education ($25 for an
IRA) Education IRA)
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UGMA/UTMA accounts $100 $50
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Retirement accounts
(other than IRAs, IRA rollovers, Education
IRAs or Roth IRAs) no minimum no minimum
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IRAs, IRA rollovers, Education IRAs or Roth
IRAs $250 $50
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Broker-dealer sponsored wrap account programs
$250 $50
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Full-time employees, officers, trustees and directors of Franklin Templeton
entities, and their immediate family members $100 $50
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PLEASE NOTE THAT YOU MAY ONLY BUY SHARES OF A FUND ELIGIBLE
FOR SALE IN YOUR STATE OR JURISDICTION.
[Begin callout]
FRANKLIN TEMPLETON FUNDS include all Franklin Templeton Investments U.S.
registered mutual funds, except Franklin Templeton Variable Insurance
Products Trust and Templeton Capital Accumulator Fund, Inc.
[End callout]
Certain Franklin Templeton funds offer multiple share classes not offered by
this Fund. Please note that for selling or exchanging your shares, or for other
purposes, the Fund's shares are considered Class A shares.
Many of the Fund's investments, through The U.S. Government Securities Money
Market Portfolio, must be paid for in federal funds, which are monies held by
the Fund's custodian on deposit at the Federal Reserve Bank of San Francisco and
elsewhere. The Fund generally cannot invest money it receives from you until it
is available to the Fund in federal funds, which may take up to two days. Until
then, your purchase may not be considered in proper form. If the Fund is able to
make investments within one business day, it may accept your order with payment
in other than federal funds.
ACCOUNT APPLICATION If you are opening a new account, please complete and sign
the enclosed account application. To save time, you can sign up now for services
you may want on your account by completing the appropriate sections of the
application (see "Investor Services" on page 12. For example, if you would like
to link one of your bank accounts to your Fund account so that you may use
electronic fund transfers to and from your bank account to buy and sell shares,
please complete the bank information section of the application. We will keep
your bank information on file for future purchases and redemptions.
BUYING SHARES
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OPENING AN ACCOUNT ADDING TO AN ACCOUNT
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[Insert graphic of
hands shaking]
Contact your investment Contact your investment
THROUGH YOUR representative representative
INVESTMENT
REPRESENTATIVE
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[Insert graphic of If you have another Franklin Before requesting a
phone] Templeton fund account with telephone purchase, please
your bank account make sure we have your bank
BY PHONE information on file, you may account information on file.
open a new account by phone. If we do not have this
(Up to $100,000 per information, you will need
day) To make a same day to send written instructions
investment, please call us with your bank's name and
1-800/632-2301 by 3:00 p.m. Pacific time. address, a voided check or
savings account deposit
slip, and a signature
guarantee if the bank and
Fund accounts do not have at
least one common owner.
To make a same day
investment, please call us
by 3:00 p.m. Pacific time.
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Make your check, Federal Make your check payable to
[Insert graphic of Reserve Draft or negotiable Franklin Federal Money Fund.
envelope] bank draft payable to Include your account number
BY MAIL Franklin Federal Money Fund. on the check.
Instruments drawn on other
mutual funds may not be Fill out the deposit slip
accepted. from your account statement
or checkbook. If you do not
Mail the check or draft and have a slip, include a note
your signed application to with your name, the Fund
Investor Services. name, and your account
number.
Mail the check and deposit
slip or note to Investor
Services.
--------------------------------------------------------------------------------
[Insert graphic of Call to receive a wire Call to receive a wire
three lightning control number and wire control number and wire
bolts] instructions. instructions.
BY WIRE Wire the funds and mail your To make a same day wire
signed application to investment, please make sure
1-800/632-2301 Investor Services. we receive your order by
(or 1-650/312-2000 Please include the wire 3:00 p.m. Pacific time.
collect) control number or your new
account number on the
application.
To make a same day wire investment, please make sure we
receive your order by 3:00 p.m. Pacific time.
--------------------------------------------------------------------------------
[Insert graphic of Call Shareholder Services at Call Shareholder Services at
two arrows pointing the number below, or send the number below or our
in opposite signed written instructions. automated TeleFACTS system,
directions] The TeleFACTS system cannot or send signed written
be used to open a new instructions.
BY EXCHANGE account.
(Please see page 14 for (Please see page 14 for
TeleFACTS(R) information on exchanges.) information on exchanges.)
1-800/247-1753
(around-the-clock
access)
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FRANKLIN TEMPLETON INVESTOR SERVICES P.O. BOX 33096,
ST. PETERSBURG, FL 33733-8096
CALL TOLL-FREE: 1-800/632-2301
(MONDAY THROUGH FRIDAY 5:30 A.M. TO 5:00 P.M., PACIFIC TIME
SATURDAY 6:30 A.M. TO 2:30 P.M., PACIFIC TIME)
[Insert graphic of person with a headset] INVESTOR SERVICES
AUTOMATIC INVESTMENT PLAN This plan offers a convenient way for you to invest in
the Fund by automatically transferring money from your checking or savings
account each month to buy shares. To sign up, complete the appropriate section
of your account application and mail it to Investor Services. If you are opening
a new account, please include the minimum initial investment of $50 ($25 for an
Education IRA) with your application.
AUTOMATIC PAYROLL DEDUCTION You may invest in the Fund automatically by
transferring money from your paycheck to the Fund by electronic funds transfer.
If you are interested, indicate on your application that you would like to
receive an Automatic Payroll Deduction Program kit.
DISTRIBUTION OPTIONS You may reinvest distributions you receive from the Fund in
an existing account in the Fund or in the same share class of another Franklin
Templeton fund. Any initial sales charges or contingent deferred sales charges
(CDSCs) will not apply if you reinvest your distributions within 365 days. You
can also have your distributions deposited in a bank account, or mailed by
check. Deposits to a bank account may be made by electronic funds transfer.
[Begin callout]
For Franklin Templeton Bank & Trust retirement plans, special forms may be
needed to receive distributions in cash. Please call 1-800/527-2020 for
information.
[End callout]
Please indicate on your application the distribution option you have chosen,
otherwise we will reinvest your distributions in the Fund. If you choose not to
reinvest your distributions, the Fund will distribute distributions paid during
the month as directed on the last business day of each month.
RETIREMENT PLANS Franklin Templeton Investments offers a variety of retirement
plans for individuals and businesses. These plans require separate applications
and their policies and procedures may be different than those described in this
prospectus. For more information, including a free retirement plan brochure or
application, please call Retirement Services at 1-800/527-2020.
TELEFACTS(R) Our TeleFACTS system offers around-the-clock access to information
about your account or any Franklin Templeton fund. This service is available
from touch-tone phones at 1-800/247-1753. For a free TeleFACTS brochure, call
1-800/DIAL BEN.
CHECK WRITING PRIVILEGES You may request redemption drafts (checks) free of
charge on your account application or, for an existing account, by calling our
TeleFACTS system. Check writing privileges allow you to write checks against
your account and are available unless you hold share certificates.
For security reasons and reasons related to the requirements of check processing
systems, the Fund can only accept checks ordered from the Fund. The Fund cannot
be responsible for any check not ordered from the Fund that is returned unpaid
to the payee.
TELEPHONE PRIVILEGES You will automatically receive telephone privileges when
you open your account, allowing you and your investment representative to buy,
sell or exchange your shares and make certain other changes to your account by
phone.
For accounts with more than one registered owner, telephone privileges also
allow the Fund to accept written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone. For all
other transactions and changes, all registered owners must sign the
instructions. In addition, our telephone exchange privilege allows you to
exchange shares by phone from a fund account requiring two or more signatures
into an identically registered money fund account requiring only one signature
for all transactions. This type of telephone exchange is available as long as
you have telephone exchange privileges on your account.
As long as we take certain measures to verify telephone requests, we will not be
responsible for any losses that may occur from unauthorized requests. Of course,
you can decline telephone purchase, exchange or redemption privileges on your
account application.
EXCHANGE PRIVILEGE You can exchange shares between most Franklin Templeton funds
within the same class*. If you exchange shares from the Fund to another Franklin
Templeton fund, a sales charge may apply unless you acquired your Fund shares by
exchange or through the reinvestment of dividends, or you otherwise qualify to
buy shares without an initial sales charge.
[Begin callout]
An EXCHANGE is really two transactions: a sale of one fund and the purchase of
another. In general, the same policies that apply to purchases and sales apply
to exchanges, including minimum investment amounts. Exchanges also have the same
tax consequences as ordinary sales and purchases.
[End callout]
Generally exchanges may only be made between identically registered accounts,
unless you send written instructions with a signature guarantee.
Because excessive trading can hurt fund performance, operations and
shareholders, the Fund reserves the right to revise or terminate the exchange
privilege, limit the amount or number of exchanges, reject any exchange, or
restrict or refuse purchases if (i) the Fund or its manager believes the Fund
would be harmed or unable to invest effectively, or (ii) the Fund receives or
anticipates simultaneous orders that may significantly affect the Fund (please
see "Market Timers" on page 19.
*Class Z shareholders of Franklin Mutual Series Fund Inc. may exchange into the
Fund. Advisor Class shareholders of other Franklin Templeton funds also may
exchange into the Fund. Advisor Class shareholders who exchange their shares for
shares of the Fund and later decide they would like to exchange into another
fund that offers Advisor Class may do so. Retirement plan assets temporarily
invested in the Fund and not previously subject to a sales charge in another
Franklin Templeton fund may be exchanged for Class C shares of another Franklin
Templeton fund. The time the shares were held in the Fund will not count towards
the CDSC holding period for the Class C shares.
SYSTEMATIC WITHDRAWAL PLAN This plan allows you to automatically sell your
shares and receive regular payments from your account. Certain terms and
minimums apply. To sign up, complete the appropriate section of your
application.
[Insert graphic of a certificate] SELLING SHARES
You can sell your shares at any time.
SELLING SHARES IN WRITING Generally, requests to sell $100,000 or less can be
made over the phone or with a simple letter. Sometimes, however, to protect you
and the Fund we will need written instructions signed by all registered owners,
with a signature guarantee for each owner, if:
[Begin callout]
A SIGNATURE GUARANTEE helps protect your account against fraud. You can obtain a
signature guarantee at most banks and securities dealers.
A notary public CANNOT provide a signature guarantee.
[End callout]
o you are selling more than $100,000 worth of shares
o you want your proceeds paid to someone who is not a registered owner
o you want to send your proceeds somewhere other than the address of
record, or preauthorized bank or brokerage firm account
We also may require a signature guarantee on instructions we receive from an
agent, not the registered owners, or when we believe it would protect the Fund
against potential claims based on the instructions received.
SELLING SHARES BY CHECK For accounts with check writing privileges, you may make
checks payable to any person and for any amount of $100 or more. Since you will
not know the exact amount in your account on the day a check clears, a check
should not be used to close your account.
When a check is presented for payment, we will redeem an equivalent number of
shares in your account to cover the amount of the check. The shares will be
redeemed at the net asset value next determined after we receive the check, as
long as the check does not exceed the collected balance in your account. If a
check is presented for payment that exceeds the collected balance in your
account, the bank may return the check unpaid.
The checks are drawn through Bank of America, N.A. Bank of America may end this
service at any time upon notice to you. You generally will not be able to
convert a check drawn on your Fund account into a certified or cashier's check
by presenting it at the bank. Since the Fund is not a bank, the Fund cannot
assure that a stop payment order you write will be effective. The Fund will use
its best efforts, however, to see that these orders are carried out.
SELLING RECENTLY PURCHASED SHARES If you sell shares recently purchased with a
check or draft, we may delay sending you the proceeds until your check or draft
has cleared, which may take seven business days or more. A certified or
cashier's check may clear in less time.
REDEMPTION PROCEEDS Your redemption check will be sent within seven days after
we receive your request in proper form. We are not able to receive or pay out
cash in the form of currency. Redemption proceeds may be delayed if we have not
yet received your signed account application.
RETIREMENT PLANS You may need to complete additional forms to sell shares in a
Franklin Templeton Bank & Trust retirement plan. For participants under age
591/2, tax penalties may apply. Call Retirement Services at 1-800/527-2020 for
details.
CONTINGENT DEFERRED SALES CHARGE (CDSC) Most Franklin Templeton funds impose a
1% CDSC on certain investments of Class A shares sold within 12 months of
purchase. While the Fund generally does not have a CDSC, it will impose one if
you sell shares exchanged into the Fund from another Franklin Templeton fund and
those shares would have been assessed a CDSC in the other fund. Please keep in
mind that the time the shares are held in the money fund does not count towards
the CDSC holding period.
The CDSC is based on the current value of the shares being sold or their net
asset value when purchased, whichever is less. To keep your CDSC as low as
possible, each time you place a request to sell shares we will first sell any
shares in your account that are not subject to a CDSC. If there are not enough
of these to meet your request, we will sell the shares in the order they were
purchased.
SELLING SHARES
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TO SELL SOME OR ALL OF YOUR SHARES
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[Insert graphic of
hands shaking]
Contact your investment representative
THROUGH YOUR INVESTMENT
REPRESENTATIVE
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[Insert graphic of Send written instructions and endorsed share
envelope] certificates (if you hold share certificates)
to Investor Services. Corporate, partnership
BY MAIL or trust accounts may need to send additional
documents.
Specify the Fund, the account number and the dollar
value or number of shares you wish to sell. Be sure to
include all necessary signatures and any additional
documents, as well as signature guarantees if required.
A check will be mailed to the name(s) and address on
the account, or otherwise according to your written
instructions.
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[Insert graphic of As long as your transaction is for $100,000 or
phone] less, you do not hold share certificates and
you have not changed your address by phone
BY PHONE within the last 15 days, you can sell your shares
by phone.
1-800/632-2301
A check will be mailed to the name(s) and address on
the account. Written instructions, with a signature
guarantee, are required to send the check to another
address or to make it payable to another person.
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[Insert graphic of You can call or write to have redemption
three lightning bolts] proceeds sent to a bank account. See the
policies above for selling shares by mail or
phone.
Before requesting to have redemption proceeds
BY ELECTRONIC FUNDS sent to a bank account, please make sure we
TRANSFER (ACH) have your bank account information on file. If
we do not have this information, you will need to send
written instructions with your bank's name and
address, a voided check or savings account deposit
slip, and a signature guarantee if the bank and Fund
accounts do not have at least one common owner.
If we receive your request in proper form by 3:00 p.m.
Pacific time, proceeds sent by ACH generally will be
available within two to three business days.
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[Insert graphic of two Obtain a current prospectus for the fund you
arrows pointing in are considering.
opposite directions]
Call Shareholder Services at the number below
BY EXCHANGE or our automated TeleFACTS system, or send
signed written instructions. See the policies
TeleFACTS(R) above for selling shares by mail or phone.
1-800/247-1753
(around-the-clock If you hold share certificates, you will need
access) to return them to the Fund before your
exchange can be processed.
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FRANKLIN TEMPLETON INVESTOR SERVICES P.O. BOX 33096,
ST. PETERSBURG, FL 33733-8096
CALL TOLL-FREE: 1-800/632-2301
(MONDAY THROUGH FRIDAY 5:30 A.M. TO 5:00 P.M., PACIFIC TIME
SATURDAY 6:30 A.M. TO 2:30 P.M., PACIFIC TIME)
[Insert graphic of paper and pen] ACCOUNT POLICIES
CALCULATING SHARE PRICE When you buy shares, you pay the net asset value (NAV)
per share. When you sell shares, you receive the NAV minus any applicable
contingent deferred sales charge (CDSC).
The Fund calculates its NAV per share at 3:00 p.m. Pacific time, each day the
New York Stock Exchange is open , by dividing its net assets by the number of
shares outstanding. The Fund's assets are generally valued at their amortized
cost.
Requests to buy and sell shares are processed at the NAV next calculated after
we receive your request in proper form.
ACCOUNTS WITH LOW BALANCES If the value of your account falls below $250 ($50
for employee and UGMA/UTMA accounts) because you sell some of your shares, we
may mail you a notice asking you to bring the account back up to its applicable
minimum investment amount. If you choose not to do so within 30 days, we may
close your account and mail the proceeds to the address of record.
STATEMENTS AND REPORTS You will receive monthly account statements that show all
your account transactions during the month. You also will receive written
notification after each transaction affecting your account (except for
distributions, transactions made through automatic investment or withdrawal
programs, and shares sold by check, which will be reported on your monthly
statement). You also will receive the Fund's financial reports every six months.
To reduce Fund expenses, we try to identify related shareholders in a household
and send only one copy of the financial reports. If you need additional copies,
please call 1-800/DIAL BEN.
If there is a dealer or other investment representative of record on your
account, he or she also will receive copies of all notifications and statements
and other information about your account directly from the Fund.
STREET OR NOMINEE ACCOUNTS You may transfer your shares from the street or
nominee name account of one dealer to another, as long as both dealers have an
agreement with Franklin Templeton Distributors, Inc. We will process the
transfer after we receive authorization in proper form from your delivering
securities dealer.
JOINT ACCOUNTS Unless you specify a different registration, accounts with two or
more owners are registered as "joint tenants with rights of survivorship" (shown
as "Jt Ten" on your account statement). To make any ownership changes to a joint
account, all owners must agree in writing, regardless of the law in your state.
MARKET TIMERS The Fund may restrict or refuse purchases or exchanges by Market
Timers. You may be considered a Market Timer if you have (i) requested an
exchange out of any of the Franklin Templeton funds within two weeks of an
earlier exchange request out of any fund, or (ii) exchanged shares out of any of
the Franklin Templeton funds more than twice within a rolling 90 day period, or
(iii) otherwise seem to follow a market timing pattern that may adversely affect
the fund. Accounts under common ownership or control with an account that is
covered by (i), (ii), or (iii) are also subject to these limits.
Anyone, including the shareholder or the shareholder's agent, who is considered
to be a Market Timer by the Fund, its manager or shareholder services agent,
will be issued a written notice of their status and the Fund's policies.
Identified Market Timers will be required to register with the market timing
desk of Franklin Templeton Investor Services, Inc., and to place all purchase
and exchange trade requests through the desk. Some funds do not allow
investments by Market Timers.
ADDITIONAL POLICIES Please note that the Fund maintains additional policies and
reserves certain rights, including:
o The Fund may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
o At any time, the Fund may change its investment minimums or waive or lower
its minimums for certain purchases.
o If you buy shares with a check or draft that is returned to the Fund
unpaid, the Fund may impose a $10 charge against your account for each
returned item.
o When you buy shares, it does not create a checking or other bank account
relationship with the Fund or any bank.
o The Fund may modify or discontinue the exchange privilege on 60 days'
notice.
o In unusual circumstances, we may temporarily suspend redemptions, or
postpone the payment of proceeds, as allowed by federal securities laws.
o For redemptions over a certain amount, the Fund reserves the right, in the
case of an emergency, to make payments in securities or other assets of the
Fund, if the payment of cash proceeds by check, wire or electronic funds
transfer would be harmful to existing shareholders.
o To permit investors to obtain the current price, dealers are responsible
for transmitting all orders to the Fund promptly.
[Insert graphic of question mark] QUESTIONS
If you have any questions about the Fund or your account, you can write to us at
P.O. Box 33096, St. Petersburg, FL 33733-8096. You also can call us at one of
the following numbers. For your protection and to help ensure we provide you
with quality service, all calls may be monitored or recorded.
HOURS (PACIFIC TIME,
DEPARTMENT NAME TELEPHONE NUMBER MONDAY THROUGH FRIDAY)
----------------------------------------------------------------------------
Shareholder Services 1-800/632-2301 5:30 a.m. to 5:00 p.m.
6:30 a.m. to 2:30 p.m.
(Saturday)
Fund Information 1-800/DIAL BEN 5:30 a.m. to 5:00 p.m.
(1-800/342-5236) 6:30 a.m. to 2:30 p.m.
(Saturday)
Retirement Services 1-800/527-2020 5:30 a.m. to 5:00 p.m.
Advisor Services 1-800/524-4040 5:30 a.m. to 5:00 p.m.
Institutional Services 1-800/321-8563 6:00 a.m. to 5:00 p.m.
TDD (hearing impaired) 1-800/851-0637 5:30 a.m. to 5:00 p.m.
TeleFACTS(R)(automated) 1-800/247-1753 (around-the-clock access)
FOR MORE INFORMATION
You can learn more about the Fund in the following documents:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes a discussion of recent market conditions and Fund strategies, financial
statements, detailed performance information, portfolio holdings and the
auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more information about the Fund, its investments and policies. It is
incorporated by reference (is legally a part of this prospectus).
For a free copy of the current annual/semiannual report or the SAI, please
contact your investment representative or call us at the number below.
FRANKLIN(R)TEMPLETON(R)
1-800/DIAL BEN(R) (1-800/342-5236)
TDD (Hearing Impaired) 1-800/851-0637
franklintempleton.com
You also can obtain information about the Fund by visiting the SEC's Public
Reference Room in Washington, D.C. (phone 1-202/942-8090) or the EDGAR Database
on the SEC's Internet site at http://www.sec.gov. You can obtain copies of this
information, after paying a duplicating fee, by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102 or by electronic request at the
following E-mail address: [email protected].
Investment Company Act file #811-3052 113 P 11/00
FRANKLIN FEDERAL MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 2000
[Insert Franklin Templeton Ben Head]
P.O. BOX 33096, ST. PETERSBURG, FL 33733-8096 1-800/DIAL BEN(R)
--------------------------------------------------------------------------------
This Statement of Additional Information (SAI) is not a prospectus. It contains
information in addition to the information in the Fund's prospectus. The Fund's
prospectus, dated November 1, 2000, which we may amend from time to time,
contains the basic information you should know before investing in the Fund. You
should read this SAI together with the Fund's prospectus.
The audited financial statements and auditor's report in the Fund's Annual
Report to Shareholders, for the fiscal year ended June 30, 2000, are
incorporated by reference (are legally a part of this SAI).
For a free copy of the current prospectus or annual report, contact your
investment representative or call 1-800/DIAL BEN (1-800/342-5236).
CONTENTS
Goal, Strategies and Risks..........................2
Officers and Directors..............................4
Management and Other Services.......................7
Portfolio Transactions..............................8
Distributions and Taxes.............................8
Organization, Voting Rights
and Principal Holders..............................9
Buying and Selling Shares..........................10
Pricing Shares.....................................12
The Underwriter....................................13
Performance........................................13
Miscellaneous Information..........................14
--------------------------------------------------------------------------------
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENT PRODUCTS:
o ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE U.S. GOVERNMENT;
o ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK;
o ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
--------------------------------------------------------------------------------
GOAL, STRATEGIES AND RISKS
--------------------------------------------------------------------------------
The Fund seeks to achieve its investment goal by investing all of its assets in
shares of The U.S. Government Securities Money Market Portfolio (Portfolio). The
Portfolio has the same investment goal and substantially similar investment
policies as the Fund, except, in all cases, the Fund may pursue its policies by
investing in a mutual fund with the same investment goal and substantially
similar policies and restrictions as the Fund. The Portfolio's investment
restrictions are the same as the Fund's, except as necessary to reflect the
Fund's policy to invest all of its assets in shares of the Portfolio.
Generally, the policies and restrictions discussed in this SAI and in the
prospectus apply when the Fund makes an investment. In most cases, the Fund is
not required to sell a security because circumstances change and the security no
longer meets one or more of the Fund's policies or restrictions. If a percentage
restriction or limitation is met at the time of investment, a later increase or
decrease in the percentage due to a change in the value or liquidity of
portfolio securities will not be considered a violation of the restriction or
limitation.
The Fund has adopted certain restrictions as fundamental policies. This means
they may only be changed if the change is approved by (i) more than 50% of the
Fund's outstanding shares or (ii) 67% or more of the Fund's shares present at a
shareholder meeting if more than 50% of the Fund's outstanding shares are
represented at the meeting in person or by proxy, whichever is less.
A non-fundamental policy may be changed by the board of directors without the
approval of shareholders.
FUNDAMENTAL INVESTMENT POLICIES
The Fund's investment goal is to obtain as high a level of current income as is
consistent with capital preservation and liquidity. The Fund also tries to
maintain a stable $1 share price.
The Fund may invest only in obligations, including U.S. Treasury bills, notes,
bonds and securities of the Government National Mortgage Association (popularly
called "GNMAs" or "Ginnie Maes") and the Federal Housing Administration, which
are issued or guaranteed by the U.S. government or which carry a guarantee that
is supported by the full faith and credit of the U.S. government, repurchase
agreements collateralized only by such securities, and stripped securities.
The Fund directly or through its investments in the Portfolio may not:
1. Borrow money or mortgage or pledge any of its assets, except that borrowings
(and a pledge of assets therefor) for temporary or emergency purposes may be
made from banks in any amount up to 10% of the total asset value.
2. Make loans, except (a) through the purchase of debt securities in accordance
with the investment objective and policies of the Portfolio, (b) to the extent
the entry into a repurchase agreement is deemed to be a loan, or (c) by the loan
of its portfolio securities in accordance with the policies described below.
3. Acquire, lease or hold real estate, provided that this limitation shall not
prohibit the purchase of municipal and other debt securities secured by the real
estate or interests therein.
4. Buy any securities "on margin" or sell any securities "short," except that it
may use such short-term credits as are necessary for the clearance of
transactions.
5. Invest in commodities and commodity contracts, puts, calls, straddles,
spreads, or any combination thereof, or interests in oil, gas, or other mineral
exploration or development programs, except that it may purchase, hold, and
dispose of "obligations with puts attached" or write covered call options in
accordance with its stated investment policies.
6. Purchase securities in private placements or in other transactions, for which
there are legal or contractual restrictions on resale and which are not readily
marketable, or enter into a repurchase agreement with more than seven days to
maturity if, as a result, more than 10% of the total assets of the Fund would be
invested in such securities or repurchase agreements, except that, to the extent
this restriction is applicable, the Fund may purchase, in private placements,
shares of another registered investment company having the same investment
objective and policies as the Fund.
7. Act as underwriter of securities issued by other persons except insofar as
the Fund may technically be deemed an underwriter under the federal securities
laws in connection with the disposition of portfolio securities, except that all
or substantially all of the assets of the Fund may be invested in another
registered investment company having the same investment objective and policies
as the Fund.
8. Purchase securities of other investment companies, except in connection with
a merger, consolidation, acquisition, reorganization; provided that all or
substantially all of the assets of the Fund may be invested in another
registered investment company having the same investment objective and policies
as the Fund.
9. Invest in any issuer for purposes of exercising control or management, except
that, to the extent this restriction is applicable, all or substantially all of
the assets of the Fund may be invested in another registered investment company
having the same investment objective and policies as the Fund.
10. Purchase securities from or sell to the Fund's officers and directors, or
any firm of which any officer or director is a member, as principal, or retain
securities of any issuer if, to the knowledge of the Fund, one or more of the
Fund's officers, directors, or investment adviser owns beneficially more than
1/2 of 1% of the securities of such issuer and all of such officers and
directors together own beneficially more than 5% of such securities.
NON-FUNDAMENTAL INVESTMENT POLICIES
The following non-fundamental policies apply to investments made by the Fund
through the Portfolio.
1. It is the Fund's policy to limit its investments to U.S. Treasury bills,
notes and bonds (including stripped securities), and repurchase agreements
collateralized only by such securities. This policy may only be changed upon 30
days' written notice to shareholders and to the National Association of
Insurance Commissioners.
2. The Fund only intends to buy stripped securities that are issued or
guaranteed by the U.S. Treasury.
3. The Fund will not make any new investments while any outstanding loans
exceed 5% of its total assets.
INVESTMENTS, TECHNIQUES, STRATEGIES AND THEIR RISKS
In trying to achieve its investment goals, the Fund may invest in the following
types of securities, engage in the following types of transactions and be
subject to the following types of risks:
CREDIT An issuer of securities may be unable to make interest payments and repay
principal. Changes in an issuer's financial strength or in a security's credit
rating may affect a security's value.
INTEREST RATE As a general rule, when interest rates rise, debt securities can
lose market value. Similarly, when interest rates fall, debt securities can gain
value. However, because the length of time to maturity of the money market
instruments in the Fund's portfolio is very short, it is unlikely to be affected
by interest rate changes in this way except in the case of unexpectedly large
interest rate changes over a very short period of time.
LOANS OF PORTFOLIO SECURITIES To generate additional income, the Fund may lend
certain of its portfolio securities to qualified banks and broker-dealers. These
loans may not exceed 33 1/3% of the value of the Fund's total assets, measured
at the time of the most recent loan. For each loan, the borrower must maintain
with the Fund's custodian collateral (consisting of any combination of cash,
securities issued by the U.S. government and its agencies and instrumentalities,
or irrevocable letters of credit) with a value at least equal to 102% of the
current market value of the loaned securities. The Fund retains all or a portion
of the interest received on investment of the cash collateral or receives a fee
from the borrower. The Fund also continues to receive any distributions paid on
the loaned securities. The Fund may terminate a loan at any time and obtain the
return of the securities loaned within the normal settlement period for the
security involved.
As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in collateral in the event of default or insolvency of the
borrower. The Fund will loan its securities only to parties who meet
creditworthiness standards approved by the Fund's board of directors, i.e.,
banks or broker-dealers that the manager has determined present no serious risk
of becoming involved in bankruptcy proceedings within the time frame
contemplated by the loan.
MASTER/FEEDER STRUCTURE The Fund's structure, where it invests all of its assets
in the Portfolio, is sometimes known as a "master/feeder" structure. By
investing all of its assets in shares of the Portfolio, the Fund, other mutual
funds and institutional investors can pool their assets. This may result in
asset growth and lower expenses, although there is no guarantee this will
happen.
If the Fund, as a shareholder of the Portfolio, has to vote on a matter relating
to the Portfolio, it will hold a meeting of Fund shareholders and will cast its
votes in the same proportion as the Fund's shareholders voted.
There are some risks associated with the Fund's master/feeder structure. If
other shareholders in the Portfolio sell their shares, the Fund's expenses may
increase. Additionally, any economies of scale the Fund has achieved as a result
of the structure may be diminished. Institutional investors in the Portfolio
that have a greater pro rata ownership interest in the Portfolio than the Fund
could also have effective voting control.
If the Portfolio changes its investment goal or any of its fundamental policies
and Fund shareholders do not approve the same change for the Fund, the Fund may
need to withdraw its investment from the Portfolio. Likewise, if the board of
directors considers it to be in the Fund's best interest, it may withdraw the
Fund's investment from the Portfolio at any time. If either situation occurs,
the board will decide what action to take. Possible solutions might include
investing all of the Fund's assets in another pooled investment entity with the
same investment goal and policies as the Fund, or hiring an investment manager
to manage the Fund's investments. Either circumstance could increase the Fund's
expenses.
REPURCHASE AGREEMENTS Under a repurchase agreement, the Fund agrees to buy
securities guaranteed as to payment of principal and interest by the U.S.
government or its agencies from a qualified bank or broker-dealer and then to
sell the securities back to the bank or broker-dealer after a short period of
time (generally, less than seven days) at a higher price. The bank or
broker-dealer must transfer to the Fund's custodian securities with an initial
market value of at least 102% of the dollar amount invested by the Fund in each
repurchase agreement. The manager will monitor the value of such securities
daily to determine that the value equals or exceeds the repurchase price.
Repurchase agreements may involve risks in the event of default or insolvency of
the bank or broker-dealer, including possible delays or restrictions upon the
Fund's ability to sell the underlying securities. The Fund will enter into
repurchase agreements only with parties who meet certain creditworthiness
standards, i.e., banks or broker-dealers that the manager has determined present
no serious risk of becoming involved in bankruptcy proceedings within the time
frame contemplated by the repurchase transaction.
STRIPPED SECURITIES are the separate income and principal components of debt
securities. Once the securities have been stripped they are referred to as zero
coupon securities. Their risks are similar to those of other money market
securities although they may be more volatile. Stripped securities do not make
periodic payments of interest prior to maturity and the stripping of the
interest coupons causes them to be offered at a discount from their face amount.
This results in the securities being subject to greater fluctuations in response
to changing interest rates than interest-paying securities of similar
maturities.
These risks also include, among others, the risk that the price movements in the
underlying securities correlate with price movements in the relevant portion of
the Fund's portfolio. The Fund either bears the risk in the same amount as the
instrument it has purchased, or there may be a negative correlation that would
result in a loss on both the underlying security and the stripped security.
WHEN-ISSUED OR DELAYED-DELIVERY TRANSACTIONS are those where payment and
delivery for the security take place at a future date. Since the market price of
the security may fluctuate during the time before payment and delivery, the Fund
assumes the risk that the value of the security at delivery may be more or less
than the purchase prices. When the Fund is the buyer in the transaction, it will
maintain cash or liquid securities, with an aggregate value equal to the amount
of its purchase commitments, in a segregated account with its custodian bank
until payment is made. The Fund will not engage in when-issued and
delayed-deliver transactions for investment leverage purposes. The Fund may
enter into repurchase agreements with certain U.S. and foreign banks and
broker-dealers.
OFFICERS AND DIRECTORS
--------------------------------------------------------------------------------
The Fund has a board of directors. The board is responsible for the overall
management of the Fund, including general supervision and review of the Fund's
investment activities. The board, in turn, elects the officers of the Fund who
are responsible for administering the Fund's day-to-day operations.
The name, age and address of the officers and board members, as well as their
affiliations, positions held with the Fund, and principal occupations during the
past five years are shown below.
Frank H. Abbott, III (79)
1045 Sansome Street, San Francisco, CA 94111
DIRECTOR
President and Director, Abbott Corporation (an investment company); director or
trustee, as the case may be, of 29 of the investment companies in Franklin
Templeton Investments; and FORMERLY, Director, MotherLode Gold Mines
Consolidated (gold mining) (until 1996) and Vacu-Dry Co. (food processing)
(until 1996).
Harris J. Ashton (68)
191 Clapboard Ridge Road, Greenwich, CT 06830
DIRECTOR
Director, RBC Holdings, Inc. (bank holding company) and Bar-S Foods (meat
packing company); director or trustee, as the case may be, of 48 of the
investment companies in Franklin Templeton Investments; and FORMERLY, President,
Chief Executive Officer and Chairman of the Board, General Host Corporation
(nursery and craft centers) (until 1998).
Robert F. Carlson (72)
2120 Lambeth Way, Carmichael, CA 95608
DIRECTOR
Vice President and past President, Board of Administration, California Public
Employees Retirement Systems (CALPERS); director or trustee, as the case may be,
of 11 of the investment companies in Franklin Templeton Investments; and
FORMERLY, member and Chairman of the Board, Sutter Community Hospitals, member,
Corporate Board, Blue Shield of California, and Chief Counsel, California
Department of Transportation.
S. Joseph Fortunato (68)
Park Avenue at Morris County, P.O. Box 1945
Morristown, NJ 07962-1945
DIRECTOR
Member of the law firm of Pitney, Hardin, Kipp & Szuch; and director or trustee,
as the case may be, of 50 of the investment companies in Franklin Templeton
Investments.
*Charles B. Johnson (67)
777 Mariners Island Blvd., San Mateo, CA 94404
CHAIRMAN OF THE BOARD AND DIRECTOR
Chairman of the Board, Chief Executive Officer, Member - Office of the
Chairman and Director, Franklin Resources, Inc.; Chairman of the Board and
Director, Franklin Investment Advisory Services, Inc.; Vice President,
Franklin Templeton Distributors, Inc.; Director, Franklin/Templeton Investor
Services, Inc. and Franklin Templeton Services, Inc.; officer and/or director
or trustee, as the case may be, of most of the other subsidiaries of Franklin
Resources, Inc. and of 49 of the investment companies in Franklin Templeton
Investments.
*Rupert H. Johnson, Jr. (60)
777 Mariners Island Blvd., San Mateo, CA 94404
PRESIDENT AND DIRECTOR
Vice Chairman, Member - Office of the Chairman and Director, Franklin
Resources, Inc.; Executive Vice President and Director, Franklin Templeton
Distributors, Inc.; Director, Franklin Advisers, Inc., Franklin Investment
Advisory Services, Inc. and Franklin/Templeton Investor Services, Inc.;
Senior Vice President, Franklin Advisory Services, LLC; and officer and/or
director or trustee, as the case may be, of most of the other subsidiaries of
Franklin Resources, Inc. and of 52 of the investment companies in Franklin
Templeton Investments.
Frank W.T. LaHaye (71)
20833 Stevens Creek Blvd., Suite 102, Cupertino, CA 95014
DIRECTOR
Chairman, Peregrine Venture Management Company (venture capital); Director, The
California Center for Land Recycling (redevelopment); director or trustee, as
the case may be, of 29 of the investment companies in Franklin Templeton
Investments; and FORMERLY, General Partner, Miller & LaHaye and Peregrine
Associates, the general partners of Peregrine Venture funds.
William J. Lippman (75)
One Parker Plaza, 9th Floor, Fort Lee, NJ 07024
Director
Senior Vice President President, Franklin Resources, Inc. and Franklin
Management, Inc.; President, Franklin Advisory Services, LLC; and officer
and/or director or trustee, as the case may be, of six of the investment
companies in Franklin Templeton Investments.
Gordon S. Macklin (72)
8212 Burning Tree Road, Bethesda, MD 20817
DIRECTOR
Director, Martek Biosciences Corporation, WorldCom, Inc. (communications
services), MedImmune, Inc. (biotechnology), Overstock.com (internet
services), White Mountains Insurance Group, Ltd. (holding company) and
Spacehab, Inc. (aerospace services); director or trustee, as the case may be,
of 48 of the investment companies in Franklin Templeton Investments; and
FORMERLY, Chairman, White River Corporation (financial services) (until 1998)
and Hambrecht & Quist Group (investment banking) (until 1992), and President,
National Association of Securities Dealers, Inc. (until 1987).
Harmon E. Burns (55)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Vice Chairman, Member - Office of the Chairman and Director, Franklin
Resources, Inc.; Executive Vice President and Director, Franklin Templeton
Distributors, Inc.; Executive Vice President, Franklin Advisers, Inc.;
Director, Franklin Investment Advisory Services, Inc., Franklin/Templeton
Investor Services, Inc. and Franklin Templeton Services, Inc.; and officer
and/or director or trustee, as the case may be, of most of the other
subsidiaries of Franklin Resources, Inc. and of 52 of the investment
companies in Franklin Templeton Investments.
Martin L. Flanagan (40)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
President, Member - Office of the President, Chief Financial Officer and
Chief Operating Officer, Franklin Resources, Inc.; Executive Vice President
and Director, Franklin/Templeton Investor Services, Inc.; President and Chief
Financial Officer, Franklin Mutual Advisers, LLC; Executive Vice President,
Chief Financial Officer and Director, Templeton Worldwide, Inc.; Executive
Vice President, Chief Operating Officer and Director, Templeton Investment
Counsel, Inc.; Executive Vice President, Franklin Advisers, Inc. and Franklin
Investment Advisory Services, Inc.; Chief Financial Officer, Franklin
Advisory Services, LLC; Chairman and Director, Franklin Templeton Services,
Inc.; officer and/or director of some of the other subsidiaries of Franklin
Resources, Inc.; and officer and/or director or trustee, as the case may be,
of 52 of the investment companies in Franklin Templeton Investments.
David P. Goss (53)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Associate General Counsel, Franklin Templeton Investments; President, Chief
Executive Officer and Director, Franklin Select Realty Trust, Property
Resources, Inc., Property Resources Equity Trust, Franklin Real Estate
Management, Inc. and Franklin Properties, Inc.; officer and director of some
of the other subsidiaries of Franklin Resources, Inc.; officer of 53 of the
investment companies in Franklin Templeton Investments; and FORMERLY,
President, Chief Executive Officer and Director, Franklin Real Estate Income
Fund and Franklin Advantage Real Estate Income Fund (until 1996).
Barbara J. Green (53)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Vice President and Deputy General Counsel, Franklin Resources, Inc.; Senior
Vice President, Templeton Worldwide, Inc. and Templeton Global Investors,
Inc.; officer of 53 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Deputy Director, Division of Investment
Management, Executive Assistant and Senior Advisor to the Chairman, Counselor
to the Chairman, Special Counsel and Attorney Fellow, U.S. Securities and
Exchange Commission (1986-1995), Attorney, Rogers & Wells (until 1986), and
Judicial Clerk, U.S. District Court (District of Massachusetts) (until 1979).
Edward V. McVey (63)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Senior Vice President, Franklin Templeton Distributors, Inc.; officer of one
of the other subsidiaries of Franklin Resources, Inc. and of 30 of the
investment companies in Franklin Templeton Investments.
Kimberley Monasterio (36)
777 Mariners Island Blvd., San Mateo, CA 94404
TREASURER AND PRINCIPAL ACCOUNTING OFFICER
Senior Vice President, Franklin Templeton Services, Inc.; and officer of 34
of the investment companies in Franklin Templeton Investments.
Thomas J. Runkel (42)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Senior Vice President and Portfolio Manager, Franklin Advisers, Inc.; and
officer of four of the investment companies in Franklin Templeton Investments.
Murray L. Simpson (63)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT AND SECRETARY
Executive Vice President and General Counsel, Franklin Resources, Inc.;
officer and/or director of some of the subsidiaries of Franklin Resources,
Inc.; officer of 53 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Chief Executive Officer and Managing Director,
Templeton Franklin Investment Services (Asia) Limited (until January 2000)
and Director, Templeton Asset Management Ltd. (until 1999).
R. Martin Wiskemann (73)
777 Mariners Island Blvd., San Mateo, CA 94404
VICE PRESIDENT
Executive Vice President, and Director, Franklin Advisers, Inc.; Senior Vice
President, Franklin Management, Inc.; and officer and/or director or trustee,
as the case may be, of 15 of the investment companies in Franklin Templeton
Investments; and FORMERLY, Vice President and Director, ILA Financial
Services, Inc. (until 1998).
*This board member is considered an "interested person" under federal securities
laws.
Note: Charles B. Johnson and Rupert H. Johnson, Jr. are brothers.
The Fund pays noninterested board members $60 per month plus $50 per meeting
attended. Board members who serve on the audit committee of the Fund and other
funds in Franklin Templeton Investments receive a flat fee of $2,000 per
committee meeting attended, a portion of which is allocated to the Fund. Members
of a committee are not compensated for any committee meeting held on the day of
a board meeting. Noninterested board members also may serve as directors or
trustees of other funds in Franklin Templeton Investments and may receive fees
from these funds for their services. The fees payable to noninterested board
members by the Fund are subject to reductions resulting from fee caps limiting
the amount of fees payable to board members who serve on other boards within
Franklin Templeton Investments. The following table provides the total fees paid
to noninterested board members by the Fund and by Franklin Templeton
Investments.
NUMBER OF
TOTAL FEES TOTAL FEES RECEIVED BOARDS IN
RECEIVED FROM FRANKLIN FRANKLIN TEMPLETON
FROM THE FUND/1 TEMPLETON INVESTMENTS ON
NAME ($) INVESTMENTS/2 ($) WHICH EACH SERVES/3
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Frank H. Abbott,III 974 156,060 29
Harris J. Ashton 1,011 363,165 48
Robert F. Carlson 1,270 89,690 11
S. Joseph Fortunato 942 363,238 50
Frank W.T. LaHaye 974 156,060 29
Gordon S. Macklin 1,011 363,165 48
1. For the fiscal year ended June 30, 2000.
2. For the calendar year ended December 31, 1999.
3. We base the number of boards on the number of registered investment companies
in Franklin Templeton Investments. This number does not include the total number
of series or funds within each investment company for which the board members
are responsible. Franklin Templeton Investments currently includes 52 registered
investment companies, with approximately 156 U.S. based funds or series.
Noninterested board members are reimbursed for expenses incurred in connection
with attending board meetings, paid pro rata by each fund in Franklin Templeton
Investments for which they serve as director or trustee. No officer or board
member received any other compensation, including pension or retirement
benefits, directly or indirectly from the Fund or other funds in Franklin
Templeton Investments. Certain officers or board members who are shareholders of
Franklin Resources, Inc. may be deemed to receive indirect remuneration by
virtue of their participation, if any, in the fees paid to its subsidiaries.
Board members historically have followed a policy of having substantial
investments in one or more of the funds in Franklin Templeton Investments, as is
consistent with their individual financial goals. In February 1998, this policy
was formalized through adoption of a requirement that each board member invest
one-third of fees received for serving as a director or trustee of a Templeton
fund in shares of one or more Templeton funds and one-third of fees received for
serving as a director or trustee of a Franklin fund in shares of one or more
Franklin funds until the value of such investments equals or exceeds five times
the annual fees paid such board member. Investments in the name of family
members or entities controlled by a board member constitute fund holdings of
such board member for purposes of this policy, and a three year phase-in period
applies to such investment requirements for newly elected board members. In
implementing such policy, a board member's fund holdings existing on February
27, 1998, are valued as of such date with subsequent investments valued at cost.
The board, with approval of all noninterested and interested board members, has
adopted written procedures designed to deal with potential conflicts of interest
that may arise from the Fund and the U.S. Government Securities Money Market
Portfolio having substantially the same boards. These procedures call for an
annual review of the Fund's relationship with the Portfolio. If a conflict
exists, the boards may take action, which may include the establishment of a new
board. The board has determined that there are no conflicts of interest at the
present time.
MANAGEMENT AND OTHER SERVICES
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MANAGER AND SERVICES PROVIDED The U.S. Government Securities Money Market
Portfolio's manager is Franklin Advisers, Inc. The manager is a wholly owned
subsidiary of Franklin Resources, Inc. (Resources), a publicly owned company
engaged in the financial services industry through its subsidiaries. Charles
B. Johnson and Rupert H. Johnson, Jr. are the principal shareholders of
Resources.
The manager provides investment research and portfolio management services, and
selects the securities for the Portfolio to buy, hold or sell. The manager also
selects the brokers who execute the Portfolio's portfolio transactions. The
manager provides periodic reports to the board, which reviews and supervises the
manager's investment activities. To protect the Portfolio, the manager and its
officers, directors and employees are covered by fidelity insurance.
The manager and its affiliates manage numerous other investment companies and
accounts. The manager may give advice and take action with respect to any of the
other funds it manages, or for its own account, that may differ from action
taken by the manager on behalf of the Portfolio. Similarly, with respect to the
Portfolio, the manager is not obligated to recommend, buy or sell, or to refrain
from recommending, buying or selling any security that the manager and access
persons, as defined by applicable federal securities laws, may buy or sell for
its or their own account or for the accounts of any other fund. The manager is
not obligated to refrain from investing in securities held by the Portfolio or
other funds it manages.
The Fund, the Portfolio, its manager and the Fund's principal underwriter have
each adopted a code of ethics, as required by federal securities laws. Under the
code of ethics, employees who are designated as access persons may engage in
personal securities transactions, including transactions involving securities
that are being considered for the Portfolio or that are currently held by the
Portfolio, subject to certain general restrictions and procedures. The personal
securities transactions of access persons of the Fund, the Portfolio, its
manager and the Fund's principal underwriter will be governed by the code of
ethics. The code of ethics is on file with, and available from, the U.S.
Securities and Exchange Commission (SEC).
MANAGEMENT FEES The Portfolio pays the manager a fee equal to an annual rate of
0.15 of 1% of the value of the Portfolio's average daily net assets.
The fee is computed at the close of business each day according to the terms of
the management agreement.
For the last three fiscal years ended June 30, the Portfolio paid the following
management fees:
MANAGEMENT FEES PAID ($)/1
-------------------------------------------------
2000 351,386
1999 430,179
1998 367,433
1. For the fiscal years ended June 30, 2000, 1999 and 1998, management fees,
before any advance waiver, totaled $376,050, $437,891 and $394,321,
respectively. Under an agreement by the manager to limit its fees, the Portfolio
paid the management fees shown.
ADMINISTRATOR AND SERVICES PROVIDED Franklin Advisers, Inc. (Advisers) has an
agreement with the Fund to provide various administrative, statistical and other
services to the Fund.
ADMINISTRATION FEES The Fund pays Advisers a monthly fee equal to an annual rate
of:
o 91/200 of 1% for the first $100 million of the fund's average daily
net assets;
o 33/100 of 1% of average daily net assets over $100 million up to and
including $250 million; and
o 7/25 of 1% of average daily net assets in excess of $250 million.
During the last three fiscal years ended June 30, the Fund paid Advisers the
following administration fees:
ADMINISTRATION FEES PAID ($)
-------------------------------------------------
2000 692,650
1999 633,457
1998 553,251
SHAREHOLDER SERVICING AND TRANSFER AGENT Franklin/Templeton Investor Services,
Inc. (Investor Services) is the Fund's shareholder servicing agent and acts as
the Fund's transfer agent and dividend-paying agent. Investor Services is
located at 777 Mariners Island Blvd., San Mateo, CA 94404. Please send all
correspondence to Investor Services to P.O. Box 33096, St. Petersburg, FL
33733-8096.
For its services, Investor Services receives a fixed fee per account. The Fund
also will reimburse Investor Services for certain out-of-pocket expenses, which
may include payments by Investor Services to entities, including affiliated
entities, that provide sub-shareholder services, recordkeeping and/or transfer
agency services to beneficial owners of the Fund. The amount of reimbursements
for these services per benefit plan participant Fund account per year will not
exceed the per account fee payable by the Fund to Investor Services in
connection with maintaining shareholder accounts.
CUSTODIAN Investor Services, as the transfer agent for The U.S. Government
Securities Money Market Portfolio, effectively acts as the Fund's custodian and
holds the Fund's shares of the Portfolio on its books. Bank of New York, Mutual
Funds Division, 90 Washington Street, New York, NY 10286, acts as custodian of
the Fund's cash, pending investment in Portfolio shares. Bank of New York also
acts as custodian of the securities and other assets of the Portfolio.
AUDITOR PricewaterhouseCoopers LLP, 333 Market Street, San Francisco, CA 94105,
is the Fund's independent auditor. The auditor gives an opinion on the financial
statements included in the Fund's Annual Report to Shareholders and reviews the
Fund's registration statement filed with the SEC.
PORTFOLIO TRANSACTIONS
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The Fund will not incur any brokerage or other costs in connection with buying
or selling shares of the Portfolio.
Since most purchases by the Portfolio are principal transactions at net prices,
the Portfolio incurs little or no brokerage costs. The Portfolio deals directly
with the selling or buying principal or market maker without incurring charges
for the services of a broker on its behalf, unless it is determined that a
better price or execution may be obtained by using the services of a broker.
Purchases of portfolio securities from underwriters will include a commission or
concession paid by the issuer to the underwriter, and purchases from dealers
will include a spread between the bid and ask prices. The Portfolio seeks to
obtain prompt execution of orders at the most favorable net price. Transactions
may be directed to dealers in return for research and statistical information,
as well as for special services provided by the dealers in the execution of
orders.
It is not possible to place a dollar value on the special executions or on the
research services the manager receives from dealers effecting transactions in
portfolio securities. The allocation of transactions to obtain additional
research services allows the manager to supplement its own research and analysis
activities and to receive the views and information of individuals and research
staffs of other securities firms. As long as it is lawful and appropriate to do
so, the manager and its affiliates may use this research and data in their
investment advisory capacities with other clients. If the Portfolio's officers
are satisfied that the best execution is obtained, the sale of Fund shares, as
well as shares of other funds in Franklin Templeton Investments, also may be
considered a factor in the selection of broker-dealers to execute the
Portfolio's portfolio transactions.
If purchases or sales of securities of the Portfolio and one or more other
investment companies or clients supervised by the manager are considered at or
about the same time, transactions in these securities will be allocated among
the several investment companies and clients in a manner deemed equitable to all
by the manager, taking into account the respective sizes of the funds and the
amount of securities to be purchased or sold. In some cases this procedure could
have a detrimental effect on the price or volume of the security so far as the
Portfolio is concerned. In other cases it is possible that the ability to
participate in volume transactions may improve execution and reduce transaction
costs to the Portfolio.
During the fiscal years ended June 30, 2000, 1999 and 1998, the Portfolio did
not pay any brokerage commissions.
As of June 30, 2000, the Fund did not own securities of its regular
broker-dealers.
DISTRIBUTIONS AND TAXES
The Fund does not pay "interest" or guarantee any fixed rate of return on an
investment in its shares.
DISTRIBUTIONS OF NET INVESTMENT INCOME The Fund typically pays dividends from
its daily net income each day that its net asset value is calculated. The Fund's
daily net income includes dividends it receives from its investment in the
Portfolio, less the estimated expenses of the Fund. Any distributions by the
Fund from such income will be taxable to you as ordinary income, whether you
receive them in cash or in additional shares.
The Portfolio's daily net income includes accrued interest and any original
issue or acquisition discount, plus or minus any gain or loss on the sale of
portfolio securities and changes in unrealized appreciation or depreciation in
portfolio securities (to the extent required to maintain a stable $1 share
price), less the estimated expenses of the Portfolio.
DISTRIBUTIONS OF CAPITAL GAINS The Fund may derive capital gains and losses in
connection with its investment in its shares of the Portfolio. Distributions
from net short-term capital gains will be taxable to you as ordinary income.
Because the Fund invests in a money fund, it does not anticipate realizing any
long-term capital gains.
MAINTAINING A $1 SHARE PRICE Gains and losses on the Fund's investment in shares
of the Portfolio and unrealized appreciation or depreciation in the value of
these shares may require the Fund to adjust distributions to maintain its $1
share price. These procedures may result in under- or over-distributions by the
Fund of its net investment income.
EFFECT OF FOREIGN INVESTMENTS ON DISTRIBUTIONS Most foreign exchange gains
realized on the sale of debt securities are treated as ordinary income by the
Portfolio. Similarly, foreign exchange losses realized on the sale of debt
securities generally are treated as ordinary losses. These gains when
distributed will be taxable to the Fund as ordinary income, and any losses will
reduce the Portfolio's ordinary income otherwise available for distribution to
the Fund. This treatment could increase or decrease the Portfolio's ordinary
income distributions to the Fund and, in turn, to you.
INFORMATION ON THE TAX CHARACTER OF DISTRIBUTIONS The Fund will inform you of
the amount of your distributions at the time they are paid, and will advise you
of their tax status for federal income tax purposes shortly after the close of
each calendar year.
If you have not held Fund shares for a full year, the Fund may designate and
distribute to you, as ordinary income, a percentage of income that is not equal
to the actual amount of such income earned during the period of your investment
in the Fund.
ELECTION TO BE TAXED AS A REGULATED INVESTMENT COMPANY The Fund has elected to
be treated as a regulated investment company under Subchapter M of the Internal
Revenue Code (Code). The Fund has qualified as a regulated investment company
for its most recent fiscal year, and intends to continue to qualify during the
current fiscal year. As a regulated investment company, the Fund generally pays
no federal income tax on the income and gains it distributes to you. The board
reserves the right not to maintain the qualification of the Fund as a regulated
investment company if it determines such course of action to be beneficial to
shareholders. In such case, the Fund will be subject to federal, and possibly
state, corporate taxes on its taxable income and gains, and distributions to you
will be taxed as ordinary dividend income to the extent of the Fund's earnings
and profits.
EXCISE TAX DISTRIBUTION REQUIREMENTS To avoid federal excise taxes, the Code
requires the Fund to distribute to you by December 31 of each year, at a
minimum, the following amounts: 98% of its taxable ordinary income earned during
the calendar year; 98% of its capital gain net income earned during the twelve
month period ending October 31; and 100% of any undistributed amounts from the
prior year. The Fund intends to declare and pay these distributions in December
(or to pay them in January, in which case you must treat them as received in
December) but can give no assurances that its distributions will be sufficient
to eliminate all taxes.
REDEMPTION OF FUND SHARES Redemptions (including redemptions in kind) and
exchanges of Fund shares are taxable transactions for federal and state income
tax purposes. Because the Fund tries to maintain a stable $1 share price,
however, you should not expect to realize any capital gain or loss on the sale
or exchange of your shares.
U.S. GOVERNMENT SECURITIES States grant tax-free status to dividends paid
from interest earned on certain U.S. government securities. The Fund
anticipates, however, that none of its distributions will qualify for this
exemption because it invests only indirectly (through the Portfolio) in any
qualifying U.S. government securities.
DIVIDENDS-RECEIVED DEDUCTION FOR CORPORATIONS Because the Portfolio's income is
derived primarily from interest rather than dividends, generally none of the
Fund's distributions will be eligible for the corporate dividends-received
deduction.
INVESTMENT IN COMPLEX SECURITIES The Portfolio may invest in complex securities,
including stripped securities. These investments may be subject to numerous
special and complex tax rules. These rules may affect the amount, timing or
character of the income distributed to the Fund by the Portfolio and, in turn,
by the Fund to you.
ORGANIZATION, VOTING RIGHTS AND PRINCIPAL HOLDERS
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The Fund is an open-end management investment company, commonly called a mutual
fund. The Fund was organized as a California corporation on April 8, 1980, and
is registered with the SEC.
Certain Franklin Templeton funds offer multiple classes of shares. The different
classes have proportionate interests in the same portfolio of investment
securities. They differ, however, primarily in their sales charge structures and
Rule 12b-1 plans. Please note that for selling or exchanging your shares, or for
other purposes, the Fund's shares are considered Class A shares.
The Fund has cumulative voting rights. For board member elections, this means
the number of votes you will have is equal to the number of shares you own times
the number of board members to be elected. You may cast all of your votes for
one candidate or distribute your votes between two or more candidates.
The Fund does not intend to hold annual shareholder meetings. The Fund may hold
special meetings, however, for matters requiring shareholder approval. A meeting
may be called by the board to consider the removal of a board member if
requested in writing by shareholders holding at least 10% of the outstanding
shares. In certain circumstances, we are required to help you communicate with
other shareholders about the removal of a board member. A special meeting also
may be called by the board in its discretion.
From time to time, the number of Fund shares held in the "street name" accounts
of various securities dealers for the benefit of their clients or in centralized
securities depositories may exceed 5% of the total shares outstanding. To the
best knowledge of the Fund, no other person holds beneficially or of record more
than 5% of the outstanding shares of the Fund.
As of October 2, 2000, the officers and board members, as a group, owned of
record and beneficially less than 1% of the outstanding shares of the Fund. The
board members may own shares in other funds in Franklin Templeton Investments.
BUYING AND SELLING SHARES
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The Fund continuously offers its shares through securities dealers who have an
agreement with Franklin Templeton Distributors, Inc. (Distributors). A
securities dealer includes any financial institution that, either directly or
through affiliates, has an agreement with Distributors to handle customer orders
and accounts with the Fund. This reference is for convenience only and does not
indicate a legal conclusion of capacity. Banks and financial institutions that
sell shares of the Fund may be required by state law to register as securities
dealers.
For investors outside the U.S., the offering of Fund shares may be limited in
many jurisdictions. An investor who wishes to buy shares of the Fund should
determine, or have a broker-dealer determine, the applicable laws and
regulations of the relevant jurisdiction. Investors are responsible for
compliance with tax, currency exchange or other regulations applicable to
redemption and purchase transactions in any jurisdiction to which they may be
subject. Investors should consult appropriate tax and legal advisors to obtain
information on the rules applicable to these transactions.
All checks, drafts, wires and other payment mediums used to buy or sell shares
of the Fund must be denominated in U.S. dollars and drawn on a U.S. bank, and
are accepted subject to collection at full face value. Checks drawn in U.S.
funds on foreign banks will not be credited to your account and dividends will
not begin to accrue until the proceeds are collected, which may take a long
period of time. We may, in our sole discretion, either (a) reject any order to
buy or sell shares denominated in any other currency or (b) honor the
transaction or make adjustments to your account for the transaction as of a date
and with a foreign currency exchange factor determined by the drawee bank. We
may deduct any applicable banking charges imposed by the bank from your account.
The offering of Fund shares may be suspended at any time and resumed at any time
thereafter.
DEALER COMPENSATION Distributors and/or its affiliates may provide financial
support to securities dealers that sell shares of Franklin Templeton
Investments. This support is based primarily on the amount of sales of fund
shares and/or total assets with Franklin Templeton Investments. The amount of
support may be affected by: total sales; net sales; levels of redemptions; the
proportion of a securities dealer's sales and marketing efforts in Franklin
Templeton Investments; a securities dealer's support of, and participation in,
Distributors' marketing programs; a securities dealer's compensation programs
for its registered representatives; and the extent of a securities dealer's
marketing programs relating to Franklin Templeton Investments. Financial support
to securities dealers may be made by payments from Distributors' resources, from
Distributors' retention of underwriting concessions and, in the case of funds
that have Rule 12b-1 plans, from payments to Distributors under such plans. In
addition, certain securities dealers may receive brokerage commissions generated
by fund portfolio transactions in accordance with the rules of the National
Association of Securities Dealers, Inc.
Distributors routinely sponsors due diligence meetings for registered
representatives during which they receive updates on various Franklin Templeton
funds and are afforded the opportunity to speak with portfolio managers.
Invitation to these meetings is not conditioned on selling a specific number of
shares. Those who have shown an interest in Franklin Templeton funds, however,
are more likely to be considered. To the extent permitted by their firm's
policies and procedures, registered representatives' expenses in attending these
meetings may be covered by Distributors.
EXCHANGE PRIVILEGE If a substantial number of shareholders should, within a
short period, sell their Fund shares under the exchange privilege, the Fund
might have to sell portfolio securities it might otherwise hold and incur the
additional costs related to such transactions.
The proceeds from the sale of shares of an investment company generally are not
available until the seventh day following the sale. The funds you are seeking to
exchange into may delay issuing shares pursuant to an exchange until that
seventh day. The sale of Fund shares to complete an exchange will be effected at
net asset value at the close of business on the day the request for exchange is
received in proper form.
SYSTEMATIC WITHDRAWAL PLAN Our systematic withdrawal plan allows you to sell
your shares and receive regular payments from your account on a monthly,
quarterly, semiannual or annual basis. The value of your account must be at
least $5,000 and the minimum payment amount for each withdrawal must be at least
$50. For retirement plans subject to mandatory distribution requirements, the
$50 minimum will not apply. There are no service charges for establishing or
maintaining a systematic withdrawal plan.
Each month in which a payment is scheduled, we will redeem an equivalent amount
of shares in your account on the day of the month you have indicated on your
account application or, if no day is indicated, on the 20th day of the month. If
that day falls on a weekend or holiday, we will process the redemption on the
next business day. For plans set up before June 1, 2000, we will continue to
process redemptions on the 25th day of the month (or the next business day)
unless you instruct us to change the processing date. Available processing dates
currently are the 1st, 5th, 10th, 15th, 20th and 25th days of the month. When
you sell your shares under a systematic withdrawal plan, it is a taxable
transaction.
Redeeming shares through a systematic withdrawal plan may reduce or exhaust the
shares in your account if payments exceed distributions received from the Fund.
If a withdrawal amount exceeds the value of your account, your account will be
closed and the remaining balance in your account will be sent to you. Because
the amount withdrawn under the plan may be more than your actual yield or
income, part of the payment may be a return of your investment.
To discontinue a systematic withdrawal plan, change the amount and schedule of
withdrawal payments, or suspend one payment, we must receive instructions from
you at least three business days before a scheduled payment. The Fund may
discontinue a systematic withdrawal plan by notifying you in writing and will
discontinue a systematic withdrawal plan automatically if all shares in your
account are withdrawn or if the Fund receives notification of the shareholder's
death or incapacity.
REDEMPTIONS IN KIND The Fund has committed itself to pay in cash (by check) all
requests for redemption by any shareholder of record, limited in amount,
however, during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of the 90-day period. This commitment
is irrevocable without the prior approval of the U.S. Securities and Exchange
Commission (SEC). In the case of redemption requests in excess of these amounts,
the board reserves the right to make payments in whole or in part in securities
or other assets of the Fund, in case of an emergency, or if the payment of such
a redemption in cash would be detrimental to the existing shareholders of the
Fund. In these circumstances, the securities distributed would be valued at the
price used to compute the Fund's net assets and you may incur brokerage fees in
converting the securities to cash.
SHARE CERTIFICATES We will credit your shares to your Fund account. We do not
issue share certificates unless you specifically request them. This eliminates
the costly problem of replacing lost, stolen or destroyed certificates. If a
certificate is lost, stolen or destroyed, you may have to pay an insurance
premium of up to 2% of the value of the certificate to replace it.
All purchases of Fund shares will be credited to you, in full and fractional
Fund shares (rounded to the nearest 1/100 of a share), in an account maintained
for you by the Fund's transfer agent. No share certificates will be issued for
fractional shares at any time. No certificates will be issued to you if you have
elected to redeem shares by check or by preauthorized bank or brokerage firm
account methods.
Any outstanding share certificates must be returned to the Fund if you want to
sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do this
either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form and to send the certificate and assignment form in separate
envelopes.
GENERAL INFORMATION If dividend checks are returned to the Fund marked "unable
to forward" by the postal service, we will consider this a request by you to
change your dividend option to reinvest all distributions. The proceeds will be
reinvested in additional shares at net asset value until we receive new
instructions.
Distribution or redemption checks sent to you do not earn interest or any other
income during the time the checks remain uncashed. Neither the Fund nor its
affiliates will be liable for any loss caused by your failure to cash such
checks. The Fund is not responsible for tracking down uncashed checks, unless a
check is returned as undeliverable.
In most cases, if mail is returned as undeliverable we are required to take
certain steps to try to find you free of charge. If these attempts are
unsuccessful, however, we may deduct the costs of any additional efforts to find
you from your account. These costs may include a percentage of the account when
a search company charges a percentage fee in exchange for its location services.
Sending redemption proceeds by wire or electronic funds transfer (ACH) is a
special service that we make available whenever possible. By offering this
service to you, the Fund is not bound to meet any redemption request in less
than the seven day period prescribed by law. Neither the Fund nor its agents
shall be liable to you or any other person if, for any reason, a redemption
request by wire or ACH is not processed as described in the prospectus.
Franklin Templeton Investor Services, Inc. (Investor Services) may pay certain
financial institutions that maintain omnibus accounts with the Fund on behalf of
numerous beneficial owners for recordkeeping operations performed with respect
to such owners. For each beneficial owner in the omnibus account, the Fund may
reimburse Investor Services an amount not to exceed the per account fee that the
Fund normally pays Investor Services. These financial institutions also may
charge a fee for their services directly to their clients.
Investor Services may charge you separate fees, negotiated directly with you,
for providing special services in connection with your account , such as
processing a large number of checks each month. Fees for special services will
not increase the Fund's expenses.
There are special procedures for banks and other institutions that wish to open
multiple accounts. An institution may open a single master account by filing one
application form with the Fund, signed by personnel authorized to act for the
institution. Individual sub-accounts may be opened when the master account is
opened by listing them on the application, or by providing instructions to the
Fund at a later date. These sub-accounts may be registered either by name or
number. The Fund's investment minimums apply to each sub-account. The Fund will
send confirmation and account statements for the sub-accounts to the
institution.
If you buy or sell shares through your securities dealer, we use the net asset
value next calculated after your securities dealer receives your request, which
is promptly transmitted to the Fund.
For institutional accounts, there may be additional methods of buying or selling
Fund shares than those described in this SAI or in the prospectus.
In the event of disputes involving multiple claims of ownership or authority to
control your account, the Fund has the right (but has no obligation) to: (a)
freeze the account and require the written agreement of all persons deemed by
the Fund to have a potential property interest in the account, before executing
instructions regarding the account; (b) interplead disputed funds or accounts
with a court of competent jurisdiction; or (c) surrender ownership of all or a
portion of the account to the IRS in response to a notice of levy.
PRICING SHARES
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When you buy shares, you pay the net asset value (NAV) per share. When you sell
shares, you receive the NAV minus any applicable contingent deferred sales
charge (CDSC).
The value of a mutual fund is determined by deducting the fund's liabilities
from the total assets of the portfolio. The net asset value per share is
determined by dividing the net asset value of the fund by the number of shares
outstanding.
The Fund calculates the NAV per share each business day at 3:00 p.m. Pacific
time. The Fund does not calculate the NAV on days the New York Stock Exchange
(NYSE) is closed for trading, which include New Year's Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day.
The valuation of The U.S. Government Securities Money Market Portfolio's
portfolio securities, including any securities set aside on the Portfolio's
books for when-issued securities, is based on the amortized cost of the
securities, which does not take into account unrealized capital gains or losses.
This method involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in calculation, it may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price the Portfolio would receive if it sold the instrument. During periods of
declining interest rates, the daily yield on shares of the Portfolio computed as
described above may tend to be higher than a like computation made by a fund
with identical investments but using a method of valuation based upon market
prices and estimates of market prices for all of its portfolio instruments.
Thus, if the use of amortized cost by the Portfolio resulted in a lower
aggregate portfolio value on a particular day, a prospective investor in the
Portfolio would be able to obtain a somewhat higher yield than would result from
an investment in a fund using only market values, and existing investors in the
Portfolio would receive less investment income. The opposite would be true in a
period of rising interest rates. The Portfolio's use of amortized cost, which
helps the Portfolio maintain a $1 share price, is permitted by a rule adopted by
the SEC.
The board has established procedures designed to stabilize, to the extent
reasonably possible, the Portfolio's price per share at $1, as computed for the
purpose of sales and redemptions. These procedures include a review of the
Portfolio's holdings by the board, at such intervals as it may deem appropriate,
to determine if the Portfolio's net asset value calculated by using available
market quotations deviates from $1 per share based on amortized cost. The extent
of any deviation will be examined by the board. If a deviation exceeds 1/2 of
1%, the board will promptly consider what action, if any, will be initiated. If
the board determines that a deviation exists that may result in material
dilution or other unfair results to investors or existing shareholders, it will
take corrective action that it regards as necessary and appropriate, which may
include selling portfolio instruments before maturity to realize capital gains
or losses or to shorten average portfolio maturity, withholding dividends,
redeeming shares in kind, or establishing a net asset value per share by using
available market quotations.
THE UNDERWRITER
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Franklin Templeton Distributors, Inc. (Distributors) acts as the principal
underwriter in the continuous public offering of the Fund's shares.
Distributors is located at 777 Mariners Island Blvd., San Mateo, CA 94404.
Distributors pays the expenses of the distribution of Fund shares, including
advertising expenses and the costs of printing sales material and prospectuses
used to offer shares to the public. The Fund pays the expenses of preparing and
printing amendments to its registration statements and prospectuses (other than
those necessitated by the activities of Distributors) and of sending
prospectuses to existing shareholders.
For the last three fiscal years ended June 30, Distributors received no payment
in connection with redemptions or repurchases of shares of the fund.
Distributors received no other compensation from the Fund for acting as
underwriter.
PERFORMANCE
--------------------------------------------------------------------------------
Performance quotations are subject to SEC rules. These rules require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotation furnished by the Fund be accompanied by
certain standardized performance information computed as required by the SEC.
Average annual total return, current yield and effective yield quotations used
by the Fund are based on the standardized methods of computing performance
mandated by the SEC. An explanation of these and other methods used by the Fund
to compute or express performance follows. Regardless of the method used, past
performance does not guarantee future results, and is an indication of the
return to shareholders only for the limited historical period used.
AVERAGE ANNUAL TOTAL RETURN Average annual total return is determined by finding
the average annual rates of return over the periods indicated below that would
equate an initial hypothetical $1,000 investment to its ending redeemable value.
The calculation assumes income dividends are reinvested at net asset value. The
quotation assumes the account was completely redeemed at the end of each period
and the deduction of all applicable charges and fees.
The average annual total returns for the indicated periods ended June 30, 2000,
were:
1 YEAR (%) 5 YEARS (%) 10 YEARS (%)
--------------------------------------------------
4.87% 4.70% 4.34%
The following SEC formula was used to calculate these figures:
n
P(1+T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of each period at the end
of each period
CURRENT YIELD Current yield shows the income per share earned by the Fund. It is
calculated by determining the net change, excluding capital changes, in the
value of a hypothetical pre-existing account with a balance of one share at the
beginning of the period, subtracting a hypothetical charge reflecting deductions
from shareholder accounts, and dividing the difference by the value of the
account at the beginning of the base period to obtain the base period return.
The result is then annualized by multiplying the base period return by 365/7.
The current yield for the seven day period ended June 30, 2000, was 5.56%.
EFFECTIVE YIELD The Fund's effective yield is calculated in the same manner as
its current yield, except the annualization of the return for the seven day
period reflects the results of compounding. The effective yield for the seven
day period ended June 30, 2000, was 5.72%.
The following SEC formula was used to calculate this figure:
365/7
Effective yield = [(Base period return + 1) ] - 1
OTHER PERFORMANCE QUOTATIONS The Fund may include in its advertising or sales
material information relating to investment goals and performance results of
funds belonging to Franklin Templeton Investments. Franklin Resources, Inc. is
the parent company of the advisors and underwriter of Franklin Templeton funds.
COMPARISONS To help you better evaluate how an investment in the Fund may
satisfy your investment goal, advertisements and other materials about the Fund
may discuss certain measures of Fund performance as reported by various
financial publications. Materials also may compare performance (as calculated
above) to performance as reported by other investments, indices, and averages.
These comparisons may include, but are not limited to, the following examples:
o Lipper - Mutual Fund Performance Analysis, Lipper - Fixed Income Fund
Performance Analysis, and Lipper - Mutual Fund Yield Survey - measure total
return and average current yield for the mutual fund industry and rank
individual mutual fund performance over specified time periods, assuming
reinvestment of all distributions, exclusive of any applicable sales charges.
o IBC Money Fund Report(R) - industry averages for seven day annualized and
compounded yields of taxable, tax-free and government money funds.
o BANK RATE MONITOR - a weekly publication that reports various bank
investments such as CD rates, average savings account rates and average loan
rates.
o SALOMON SMITH BARNEY BOND MARKET ROUNDUP - a weekly publication that reviews
yield spread changes in the major sectors of the money, government agency,
futures, options, mortgage, corporate, Yankee, Eurodollar, municipal, and
preferred stock markets and summarizes changes in banking statistics and
reserve aggregates.
From time to time, advertisements or information for the Fund may include a
discussion of certain attributes or benefits to be derived from an investment in
the Fund. The advertisements or information may include symbols, headlines, or
other material that highlights or summarizes the information discussed in more
detail in the communication.
Advertisements or information also may compare the Fund's performance to the
return on certificates of deposit (CDs) or other investments. You should be
aware, however, that an investment in the Fund involves the risk of fluctuation
of principal value, a risk generally not present in an investment in a CD issued
by a bank. CDs are frequently insured by an agency of the U.S. government. An
investment in the Fund is not insured by any federal, state or private entity.
In assessing comparisons of performance, you should keep in mind that the
composition of the investments in the reported indices and averages is not
identical to the Fund's portfolio, the indices and averages are generally
unmanaged, and the items included in the calculations of the averages may not be
identical to the formula used by the Fund to calculate its figures. In addition,
there can be no assurance that the Fund will continue its performance as
compared to these other averages.
MISCELLANEOUS INFORMATION
--------------------------------------------------------------------------------
The Fund may help you achieve various investment goals such as accumulating
money for retirement, saving for a down payment on a home, college costs and
other long-term goals. The Franklin College Costs Planner may help you in
determining how much money must be invested on a monthly basis to have a
projected amount available in the future to fund a child's college education.
(Projected college cost estimates are based upon current costs published by the
College Board.) The Franklin Retirement Planning Guide leads you through the
steps to start a retirement savings program. Of course, an investment in the
Fund cannot guarantee that these goals will be met.
The Fund is a member of Franklin Templeton Investments, one of the largest
mutual fund organizations in the U.S., and may be considered in a program for
diversification of assets. Founded in 1947, Franklin is one of the oldest mutual
fund organizations and now services approximately 3 million shareholder
accounts. In 1992, Franklin, a leader in managing fixed-income mutual funds and
an innovator in creating domestic equity funds, joined forces with Templeton, a
pioneer in international investing. The Mutual Series team, known for its
value-driven approach to domestic equity investing, became part of the
organization four years later. Together, Franklin Templeton Investments has over
$236 billion in assets under management for more than 5 million U.S. based
mutual fund shareholder and other accounts. Franklin Templeton Investments
offers 107 U.S. based open-end investment companies to the public. The Fund may
identify itself by its Nasdaq symbol or CUSIP number.
Currently, there are more mutual funds than there are stocks listed on the New
York Stock Exchange. While many of them have similar investment goals, no two
are exactly alike. Shares of the Fund are generally sold through securities
dealers, whose investment representatives are experienced professionals who can
offer advice on the type of investments suitable to your unique goals and needs,
as well as the risks associated with such investments.
FRANKLIN FEDERAL MONEY FUND
FILE NOS. 2-67480
811-3052
FORM N-1A
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
The following exhibits are incorporated by reference, to the previously
filed document below, except as noted:
(a) Articles of Incorporation
(i) Articles of Incorporation dated April 7, 1980
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(ii) Certificate of Amendment to Articles of Incorporation dated
March 12, 1981
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(b) By-Laws
(i) By-Laws
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(ii) Amendment to By-Laws dated November 17, 1987
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(c) Instruments Defining Rights of Security Holders
Not Applicable
(d) Investment Advisory Contracts
(i) Administration Agreement between the Registrant and Franklin
Advisers, Inc., dated August 1, 1994
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(e) Underwriting Contracts
(i) Amended and Restated Distribution Agreement between the
Registrant and Franklin/Templeton Distributors, Inc. dated
April 23, 1995
Filing: Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: August 31, 1995
(ii) Forms of Dealer Agreements between Franklin/Templeton
Distributors, Inc. and Securities Dealers dated March 1, 1998
(iii)Amendment of Amended and Restated Distribution Agreement
between Registrant and Franklin/Templeton Distributors, Inc.
dated January 12, 1999
(f) Bonus or Profit Sharing Contracts
Not Applicable
(g) Custodian Agreements
(i) Master Custody Agreement between the Registrant and Bank of
New York dated February 16, 1996
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: October 29, 1996
(ii) Terminal Link Agreement between the Registrant and Bank of New
York dated February 16, 1996
Filing: Post-Effective Amendment No. 21 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: October 29, 1996
(iii)Amendment dated May 7, 1997 to the Master Custody Agreement
dated February 16, 1996 between Registrant and Bank of New York
Filing: Post-Effective Amendment No. 22 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: October 29, 1997
(iv) Amendment dated February 27, 1998 to Master Custody Agreement
dated February 16, 1996 between Registrant and Bank of New York
Filing: Post-Effective Amendment No. 24 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: October 29, 1998
(v) Amendment dated August 30, 2000 to Exhibit A of the Master
Custody Agreement between the Registrant and Bank of New York
dated February 16, 1996
(h) Other Material Contracts
Not Applicable
(i) Legal Opinion
(i) Opinion and Consent of Counsel dated October 26, 1998
Filing: Post-Effective Amendment No. 24 to Registration
Statement on Form N-1A
File No. 2-67480
Filing Date: October 29, 1998
(j) Other Opinion
(i) Consent of Independent Auditors
(k) Omitted Financial Statements
Not Applicable
(l) Initial Capital Agreements
Not Applicable
(m) Rule 12b-1 Plan
Not Applicable
(o) Rule 18f-3 Plan
Not Applicable
(p) Power of Attorney
(i) Power of Attorney for Franklin Federal Money Fund dated
July 13, 2000
(ii) Power of Attorney for The Money Market Portfolios dated
July 13, 2000
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None
ITEM 25. INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a Court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Please see the Articles of Incorporation, By-Laws, Administration Agreement
and Distribution Agreements previously filed as exhibits and incorporated
herein by reference.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
The officers and directors of the Registrant's administrator and the Master
Fund's investment adviser, Franklin Advisers, Inc., (Advisers) also serve as
officers and/or directors for (1) Advisers' corporate parent, Franklin
Resources, Inc., and/or (2) other investment companies in Franklin Templeton
Investments. In addition, Mr. Charles B. Johnson was formerly a director of
General Host Corporation. For additional information please see Part B and
Schedules A and D of Form ADV of Advisers (SEC File 801-26292), incorporated
herein by reference, which sets forth the officers and directors of Advisers
and information as to any business, profession, vocation or employment of a
substantial nature engaged in by those officers and directors during the past
two years.
ITEM 27. PRINCIPAL UNDERWRITERS
a) Franklin/Templeton Distributors, Inc., (Distributors) also acts as
principal underwriter of shares of:
Franklin Asset Allocation Fund
Franklin California Tax-Free Income Fund, Inc.
Franklin California Tax-Free Trust
Franklin Custodian Funds, Inc.
Franklin Federal Money Fund
Franklin Federal Tax-Free Income Fund
Franklin Floating Rate Master Trust
Franklin Floating Rate Trust
Franklin Gold and Precious Metals Fund
Franklin Growth and Income Fund
Franklin High Income Trust
Franklin Investors Securities Trust
Franklin Managed Trust
Franklin Money Fund
Franklin Mutual Series Fund Inc.
Franklin Municipal Securities Trust
Franklin New York Tax-Free Income Fund
Franklin New York Tax-Free Trust
Franklin Real Estate Securities Trust
Franklin Strategic Mortgage Portfolio
Franklin Strategic Series
Franklin Tax-Exempt Money Fund
Franklin Tax-Free Trust
Franklin Templeton Fund Allocator Series
Franklin Templeton Global Trust
Franklin Templeton International Trust
Franklin Templeton Money Fund Trust
Franklin Value Investors Trust
Franklin Templeton Variable Insurance Products Trust
Institutional Fiduciary Trust
Templeton Capital Accumulator Fund, Inc.
Templeton Developing Markets Trust
Templeton Funds, Inc.
Templeton Global Investment Trust
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund, Inc.
Templeton Growth Fund, Inc.
Templeton Income Trust
Templeton Institutional Funds, Inc.
b) The information required by this Item 29 with respect to each director
and officer of Distributors is incorporated by reference to Part B of this
N-1A and Schedule A of Form BD filed by Distributors with the Securities and
Exchange Commission pursuant to the Securities Act of 1934 (SEC File No.
8-5889).
c) Not Applicable. Registrant's principal underwriter is an affiliated
person of an affiliated person of the Registrant.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by Section
31 (a) of the Investment Company Act of 1940 are kept by the Fund or its
shareholder services agent, Franklin/Templeton Investor Services, Inc., both
of whose address is 777 Mariners Island Blvd., San Mateo, CA 94404.
ITEM 29. MANAGEMENT SERVICES
There are no management related service contracts not discussed in Part A or
Part B.
ITEM 30. UNDERTAKINGS
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Mateo and the State of California, on the 27th day
of October, 2000.
FRANKLIN FEDERAL MONEY FUND
(Registrant)
By: /S/ DAVID P. GOSS
-----------------
David P. Goss
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
RUPERT H. JOHNSON, JR.* Director and Principal Executive
Rupert H. Johnson, Jr. Officer
Dated: October 27, 2000
MARTIN L. FLANAGAN* Principal Financial Officer
Martin L. Flanagan Dated: October 27, 2000
KIMBERLEY MONASTERIO* Principal Accounting Officer
Kimberley Monasterio Dated: October 27, 2000
FRANK H. ABBOTT III* Director
Frank H. Abbott III Dated: October 27, 2000
HARRIS J. ASHTON* Director
Harris J. Ashton Dated: October 27, 2000
ROBERT F. CARLSON* Director
Robert F. Carlson Dated: October 27, 2000
S. JOSEPH FORTUNATO* Director
S. Joseph Fortunato Dated: October 27, 2000
CHARLES B. JOHNSON* Director
Charles B. Johnson Dated: October 27, 2000
FRANK W.T. LAHAYE* Director
Frank W.T. LaHaye Dated: October 27, 2000
WILLIAM J. LIPPMAN* Director
William J. Lippman Dated: October 27, 2000
GORDON S. MACKLIN* Director
Gordon S. Macklin Dated: October 27, 2000
*By /S/ DAVID P. GOSS
-----------------
David P. Goss, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the undersigned has duly consented to the
filing of this Registration Statement of Franklin Federal Money Fund and has
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of San Mateo and the State
of California, on the 27th day of October, 2000.
THE MONEY MARKET PORTFOLIOS
By: /S/ DAVID P. GOSS
-----------------
David P. Goss
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following Trustees and Officers of The
Money Market Portfolios in the capacities and on the dates indicated:
CHARLES E. JOHNSON* Trustee and Principal Executive
Charles E. Johnson Officer
Dated: October 27, 2000
MARTIN L. FLANAGAN* Principal Financial Officer
Martin L. Flanagan Dated: October 27, 2000
KIMBERLEY MONASTERIO* Principal Accounting Officer
Kimberley Monasterio Dated: October 27, 2000
FRANK H. ABBOTT III* Trustee
Frank H. Abbott III Dated: October 27, 2000
HARRIS J. ASHTON* Trustee
Harris J. Ashton Dated: October 27, 2000
ROBERT F. CARLSON* Trustee
Robert F. Carlson Dated: October 27, 2000
S. JOSEPH FORTUNATO* Trustee
S. Joseph Fortunato Dated: October 27, 2000
CHARLES B. JOHNSON* Trustee
Charles B. Johnson Dated: October 27, 2000
RUPERT H. JOHNSON, JR.* Trustee
Rupert H. Johnson, Jr. Dated: October 27, 2000
FRANK W.T. LAHAYE* Trustee
Frank W.T. LaHaye Dated: October 27, 2000
GORDON S. MACKLIN* Trustee
Gordon S. Macklin Dated: October 27, 2000
*By /S/ DAVID P. GOSS
-----------------
David P. Goss, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
FRANKLIN FEDERAL MONEY FUND
REGISTRATION STATEMENT
EXHIBITS INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.(a)(i) Articles of Incorporation dated *
April 7, 1980
EX-99.(a)(ii) Certificate of Amendment to *
Articles of Incorporation dated
March 12, 1981
EX-99.(b)(i) By-Laws *
EX-99.(b)(ii) Amendment to By-Laws dated *
November 17, 1987
EX-99.(d)(i) Administration Agreement between *
the Registrant and Franklin
Advisers, Inc. dated August 1,
1994
EX-99.(e)(i) Amended and Restated Distribution *
Agreement between the Registrant
and Franklin/Templeton
Distributors, Inc., dated April
23, 1995
EX-99.(e)(ii) Forms of Dealer Agreements Attached
between Franklin/Templeton
Distributors, Inc., and
Securities Dealers dated March 1,
1998
EX-99.(e)(iii) Amendment of Amended and Restated Attached
Distribution Agreement between
Registrant and Franklin/Templeton
Distributors, Inc. dated January
12, 1999
EX-99.(g)(i) Master Custody Agreement between *
the Registrant and Bank of New
York dated February 16, 1996
EX-99.(g)(ii) Terminal Link Agreement between *
the Registrant and Bank of New
York dated February 16, 1996
EX-99.(g)(iii) Amendment dated May 7, 1997 to *
the Master Custody Agreement
dated February 16, 1996 between
Registrant and Bank of New York
EX-99.(g)(iv) Amendment dated February 27, 1998 *
to Master Custody Agreement dated
February 16, 1996 between
Registrant and Bank of New York
EX-99.(g)(v) Amendment dated August 30, 2000 Attached
to Exhibit A of the Master
Custody Agreement between the
Registrant and Bank of New York
dated February 16, 1996
EX-99.(i)(i) Opinion and Consent of Counsel *
dated October 26, 1998
EX-99.(j)(i) Consent of Independent Auditors Attached
EX-99.(p)(i) Power of Attorney for Franklin Attached
Federal Money Fund dated July 13,
2000
EX-99.(p)(ii) Power of Attorney for The Money Attached
Market Portfolios dated July 13,
2000
*Incorporated by reference
