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SUPPLEMENT DATED OCTOBER 1, 1998
TO THE PROSPECTUS OF
FRANKLIN INVESTORS SECURITIES TRUST
(FIST 1 - Franklin Global Government Income Fund, Franklin Short-Intermediate
U.S. Government Securities Fund, Franklin Convertible Securities Fund, and
Franklin Equity Income Fund)
dated March 1, 1998, as amended August 3, 1998
The prospectus is amended as follows:
I. The following new category 12 is added to the end of the second list of
sales charge waiver categories in the section "Sales Charge Waivers," found
under "How Do I Buy Shares? - Sales Charge Reductions and Waivers":
12. Qualified registered investment advisors who buy through a broker-dealer
or service agent who has entered into an agreement with Distributors
II. Distribution option 3 in the section "What Distributions Might I Receive
From the Fund? - Distribution Options" is replaced with the following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions in cash. If you have the money
sent to another person or to a checking or savings account, you may
need a signature guarantee. If you send the money to a checking or
savings account, please see "Electronic Fund Transfers" under "Services
to Help You Manage Your Account."
III. The second sentence in the section "Services to Help You Manage Your
Account - Automatic Investment Plan" is replaced with the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to a fund each month to buy additional shares.
IV. The second paragraph under "Services to Help You Manage Your Account -
Systematic Withdrawal Plan" is replaced with the following:
If you would like to establish a systematic withdrawal plan, please
complete the systematic withdrawal plan section of the shareholder
application included with this prospectus and indicate how you would like
to receive your payments. You may choose to direct your payments to buy the
same class of shares of another Franklin Templeton Fund or have the money
sent directly to you, to another person, or to a checking or savings
account. If you choose to have the money sent to a checking or savings
account, please see "Electronic Fund Transfers" below. Once your plan is
established, any distributions paid by the fund will be automatically
reinvested in your account.
V. The section "Services to Help You Manage Your Account - Electronic Fund
Transfers - Class I Only" is replaced with the following:
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain distributions or payments
under a systematic withdrawal plan sent directly to a checking or savings
account. If the account is with a bank that is a member of the Automated
Clearing House, the payments may be made automatically by electronic funds
transfer. If you choose this option, please allow at least fifteen days for
initial processing. We will send any payments made during that time to the
address of record on your account.
VI. The following definition is revised in the "Useful Terms and Definitions"
section:
CONTINGENCY PERIOD - For Class I shares, the 12 month period during which a
Contingent Deferred Sales Charge may apply. For Class II shares, the
contingency period is 18 months. The holding period begins on the day you
buy your shares. For example, if you buy shares on the 18th of the month,
they will age one month on the 18th day of the next month and each
following month.
VII. The following paragraphs are added to the end of the section "What Are
the Risks of Investing in the Fund?" and apply to all funds except the
Short-Intermediate Fund:
EURO. On January 1, 1999, the European Monetary Union (EMU) plans to
introduce a new single currency, the Euro, which will replace the national
currency for participating member countries. If the fund holds investments
in countries with currencies replaced by the Euro, the investment process,
including trading, foreign exchange, payments, settlements, cash accounts,
custody and accounting will be impacted.
The process to establish the Euro may result in market volatility. It is
not possible to predict the impact of the Euro on the business or financial
condition of European issuers or on the fund. The transition and the
elimination of currency risk among EMU countries may change the economic
environment and behavior of investors, particularly in European markets. To
the extent the fund holds non-U.S. dollar (Euro or other) denominated
securities, it will still be exposed to currency risk due to fluctuations
in those currencies versus the U.S. dollar.
Resources has created an interdepartmental team to handle all Euro-related
changes to enable the Franklin Templeton Funds to process transactions
accurately and completely with minimal disruption to business activities.
While there can be no assurance that the fund will not be adversely
affected, Advisers and its affiliated service providers are taking steps
that they believe are reasonably designed to address the Euro issue.
Please keep this supplement for future reference.
