o FIST1 P-2 SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS OF
FRANKLIN INVESTORS SECURITIES TRUST
(FRANKLIN CONVERTIBLE SECURITIES FUND, FRANKLIN EQUITY INCOME FUND,
FRANKLIN GLOBAL GOVERNMENT INCOME FUND, FRANKLIN SHORT-INTERMEDIATE
U.S. GOVERNMENT SECURITIES FUND)
DATED MARCH 1, 2000
The prospectus is amended as follows:
I. All references to Franklin Templeton Trust Company in this
prospectus are replaced with Franklin Templeton Bank & Trust.
II. All references to the $5.00 exchange fee applicable to market
timers are no longer applicable.
III. The "Management" section on page 22 is replaced with the following:
[Insert graphic of briefcase] MANAGEMENT
------------------------------------------------------------------------
Franklin Advisers, Inc. (Advisers), 777 Mariners Island Blvd., San
Mateo, CA 94404, is the fund's investment manager. Together, Advisers
and its affiliates manage over $229 billion in assets.
The team responsible for the fund's management is:
FRANK FELICELLI CFA, senior vice president of advisers
Mr. Felicelli has been a manager of the fund since 1988. He joined the
Franklin Templeton Group in 1986.
DEREK TANER CFA, portfolio manager of advisers
Mr. Taner has been a manager of the Fund since March 2000. He joined
the Franklin Templeton Group in 1991.
HOWARD M. MCELDOWNEY, portfolio manager of advisers
Mr. McEldowney has been generally involved with the investment strategy of the
fund's portfolio since the fund's inception and has more than 30 years'
experience in the securities industry.
The fund pays Advisers a fee for managing the fund's assets. For the fiscal year
ended October 31, 1999, the fund paid 0.50% of its average monthly net assets to
the manager for its services.
IV. The section "Minimum investments" on page 50 is replaced with the
following:
MINIMUM INVESTMENTS
----------------------------------------------------------------------
INITIAL ADDITIONAL
----------------------------------------------------------------------
Regular accounts $1,000 $50
----------------------------------------------------------------------
Automatic investment plans $50 ($25 for $50 ($25
an Education for an
IRA) Education IRA)
----------------------------------------------------------------------
UGMA/UTMA accounts $100 $50
----------------------------------------------------------------------
Retirement accounts
(other than IRAs, IRA rollovers, no minimum no minimum
Education IRAs or Roth IRAs)
----------------------------------------------------------------------
IRAs, IRA rollovers, Education IRAs or $250 $50
Roth IRAs
----------------------------------------------------------------------
Broker-dealer sponsored wrap account $250 $50
programs
----------------------------------------------------------------------
Full-time employees, officers,
trustees and directors of Franklin
Templeton entities, and their $100 $50
immediate family members
----------------------------------------------------------------------
PLEASE NOTE THAT YOU MAY ONLY BUY SHARES OF A FUND ELIGIBLE FOR
SALE IN YOUR STATE OR JURISDICTION.
V. The section "Account Application" on page 51 is replaced with the
following:
ACCOUNT APPLICATION If you are opening a new account, please complete and sign
the enclosed account application. Make sure you indicate the share class you
have chosen. If you do not indicate a class, we will place your purchase in
Class A shares. 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 52). 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.
VI. The following is added to the section "Buying shares" on page 51:
----------------------------------------------------------------------
[Insert graphic of If you have another Before requesting a
phone] BY PHONE Franklin Templeton telephone purchase,
fund account with please make sure we
(Up to $100,000 per your bank account have your bank
day) information on file, account information
you may open a new on file. If we do
1-800/632-2301 account by phone. not have this
information, you
To make a same day will need to send
investment, please written
call us by 1:00 p.m. instructions with
Pacific time or the your bank's name
close of the New and address, a
York Stock Exchange, voided check or
whichever is earlier. 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 1:00 p.m.
Pacific time or the close of
the New York Stock Exchange,
whichever is earlier.
----------------------------------------------------------------------
VII. The section "Automatic Investment Plan" on page 52 is replaced
with the following:
AUTOMATIC INVESTMENT PLAN This plan offers a convenient way for you to invest
in a 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.
VIII. The section "Telephone Privileges" on page 53 is replaced with
the following:
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.
IX. The last paragraph of the "Exchange Privilege" section on page 53
is replaced with the following:
Because excessive trading can hurt fund performance, operations and
shareholders, each fund, effective November 1, 2000, 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 58).
X. In the Selling Shares table on page 56 the section "By Electronic
Funds Transfer (ACH)" is replaced with the following:
----------------------------------------------------------------------
[Insert graphic of You can call or write to have redemption
three lightning proceeds sent to a bank account. See the
bolts] BY ELECTRONIC policies above for selling shares by mail
FUNDS TRANSFER (ACH) or phone.
Before requesting to have redemption proceeds sent to a
bank account, please make sure we 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 1:00 p.m.
Pacific time, proceeds sent by ACH generally will be
available within two to three business days.
----------------------------------------------------------------------
XI. The section "Market Timers" on page 58 is replaced with the
following:
MARKET TIMERS Each 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.
XII. The first category in the section "Additional Policies" on page 58
is revised to read:
o The funds may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
XIII. The following paragraph is added to the section "Dealer
Compensation" on page 59:
MARKET TIMERS. Please note that for Class A NAV purchases by market timers,
including purchases of $1 million or more, dealers are not eligible to receive
the dealer commission. Dealers, however, may be eligible to receive the 12b-1
fee from the date of purchase.
Please keep this supplement for future reference.
This page intentionally left blank.
o FIST1 PA-2
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS OF
FRANKLIN INVESTORS SECURITIES TRUST
(FRANKLIN GLOBAL GOVERNMENT INCOME FUND AND
FRANKLIN SHORT-INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND - ADVISOR CLASS)
DATED MARCH 1, 2000
The prospectus is amended as follows:
I. All references to Franklin Templeton Trust Company in this prospectus are
replaced with Franklin Templeton Bank & Trust.
II. All references to the $5.00 exchange fee applicable to market timers are
no longer applicable.
III. The section "Account Application" on page 24 is replaced with the
following:
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 25). 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.
IV. The following is added to the section "Buying shares" on page 24:
--------------------------------------------------------------------------------
[Insert graphic of phone] If you have another Before requesting a
BY PHONE Franklin Templeton telephone purchase,
account with your bank please make sure we
(Up to $100,000 per day) account information on have your bank account
file, you may open a information on file.
1-800/632-2301 new account by phone. If we do not have this
information, you will
To make a same day need to send written
investment, please call instructions with your
us by 1:00 p.m. Pacific bank's name and
time or the close of address, a voided
the New York Stock check or savings
Exchange, whichever is account deposit slip,
earlier. 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 1:00 p.m. Pacific
time or the close of
the New York Stock
Exchange, whichever is
earlier.
--------------------------------------------------------------------------------
V. The section "Automatic Investment Plan" on page 25 is replaced with the
following:
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 your minimum initial investment with your
application.
VI. The following section is added to "Investor Services" on page 25:
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.
VII. The section "Telephone Privileges" on page 25 is replaced with the
following:
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.
VIII. The last paragraph of the "Exchange Privilege" section on page 26 is
replaced with the following:
Because excessive trading can hurt fund performance, operations and
shareholders, each fund, effective November 1, 2000, 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 31).
IX. In the Selling Shares table on page 29 the section "By Electronic Funds
Transfer (ACH)" is replaced with the following:
--------------------------------------------------------------------------------
[Insert graphic of three You can call or write to have redemption proceeds
lightning bolts] BY sent to a bank account. See the policies above for
ELECTRONIC FUNDS selling shares by mail or phone.
TRANSFER (ACH)
Before requesting to have redemption proceeds sent
to a bank account, please make sure we 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 1:00
p.m. Pacific time, proceeds sent by ACH generally
will be available within two to three business days.
--------------------------------------------------------------------------------
X. The section "Market Timers" on page 31 is replaced with the following:
MARKET TIMERS Each 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.
XI. The first category in the section "Additional Policies" on page 31 is
revised to read:
o The funds may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
Please keep this supplement for future reference.
o FIST2 P-2
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS OF
FRANKLIN INVESTOR SECURITIES TRUST
(FRANKLIN ADJUSTABLE U.S. GOVERNMENT SECURITIES AND FRANKLIN BOND FUNDS)
DATED MARCH 1, 2000
I. All references to Franklin Templeton Trust Company in this prospectus are
replaced with Franklin Templeton Bank & Trust.
II. All references to the $5.00 exchange fee applicable to market timers are
no longer applicable.
III. The section "Minimum investments" on page 25 is replaced with the
following:
MINIMUM INVESTMENTS
--------------------------------------------------------------------------------
INITIAL ADDITIONAL
--------------------------------------------------------------------------------
Regular accounts $1,000 $50
--------------------------------------------------------------------------------
Automatic investment plans $50 ($25 for an $50 ($25 for
Education IRA) an Education
IRA)
--------------------------------------------------------------------------------
UGMA/UTMA accounts $100 $50
--------------------------------------------------------------------------------
Retirement accounts
(other than IRAs, IRA rollovers, Education
IRAs or Roth IRAs) no minimum no minimum
--------------------------------------------------------------------------------
IRAs, IRA rollovers, Education IRAs or Roth $250 $50
IRAs
--------------------------------------------------------------------------------
Broker-dealer sponsored wrap account programs $250 $50
--------------------------------------------------------------------------------
Full-time employees, officers, trustees and
directors of Franklin Templeton entities,
and their immediate family members $100 $50
--------------------------------------------------------------------------------
PLEASE NOTE THAT YOU MAY ONLY BUY SHARES OF A FUND ELIGIBLE
FOR SALE IN YOUR STATE OR JURISDICTION.
IV. The section "Account Application" on page 26 is replaced with the
following:
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 27). 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.
V. The following is added to the section "Buying shares" on page 26:
--------------------------------------------------------------------------------
[Insert graphic of phone] If you have another Before requesting a
BY PHONE Franklin Templeton fund telephone purchase,
account with your bank please make sure we
(Up to $100,000 per day) account information on have your bank account
file, you may open a information on file.
1-800/632-2301 new account by phone. If we do not have this
information, you will
To make a same day need to send written
investment, please call instructions with your
us by 1:00 p.m. Pacific bank's name and
time or the close of address, a voided
the New York Stock check or savings
Exchange, whichever is account deposit slip,
earlier. 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 1:00 p.m. Pacific
time or the close of
the New York Stock
Exchange, whichever is
earlier.
--------------------------------------------------------------------------------
VI. The section "Automatic Investment Plan" on page 27 is replaced with the
following:
AUTOMATIC INVESTMENT PLAN This plan offers a convenient way for you to invest
in a 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.
VII. The section "Telephone Privileges" on page 28 is replaced with the
following:
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.
VIII. The last paragraph of the "Exchange Privilege" section on page 28 is
replaced with the following:
Because excessive trading can hurt fund performance, operations and
shareholders, each fund, effective November 1, 2000, 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 33).
IX. In the Selling Shares table on page 31 the section "By Electronic Funds
Transfer (ACH)" is replaced with the following:
--------------------------------------------------------------------------------
[Insert graphic of three You can call or write to have redemption proceeds
lightning bolts] BY sent to a bank account. See the policies above for
ELECTRONIC FUNDS selling shares by mail or phone.
TRANSFER (ACH)
Before requesting to have redemption proceeds sent
to a bank account, please make sure we 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 1:00
p.m. Pacific time, proceeds sent by ACH generally
will be available within two to three business days.
--------------------------------------------------------------------------------
X. The section "Market Timers" on page 33 is replaced with the following:
MARKET TIMERS Each 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.
XI. The first category in the section "Additional Policies" on page 33 is
revised to read:
o The funds may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
XII. The following paragraph is added to the section "Dealer Compensation" on
page 34:
MARKET TIMERS. Please note that for NAV purchases by market timers, including
purchases of $1 million or more, dealers are not eligible to receive the dealer
commission. Dealers, however, may be eligible to receive the 12b-1 fee from the
date of purchase.
Please keep this supplement for future reference.
o FIST2 PA-2
SUPPLEMENT DATED SEPTEMBER 1, 2000
TO THE PROSPECTUS OF
FRANKLIN BOND FUND - ADVISOR CLASS
DATED MARCH 1, 2000
The prospectus is amended as follows:
I. Under the "Principal investment strategies" discussion on page 2, the
fifth paragraph of that section is replaced with the following:
Asset backed-securities are securities backed by loans, leases and other
receivables.
II. All references to Franklin Templeton Trust Company in this prospectus are
replaced with Franklin Templeton Bank & Trust.
III. All references to the $5.00 exchange fee applicable to market timers are
no longer applicable.
IV. The section "Account Application" on page 14 is replaced with the
following:
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 15). 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.
V. The following is added to the section "Buying shares" on page 14:
--------------------------------------------------------------------------------
[Insert graphic of phone] If you have another Before requesting a
BY PHONE Franklin Templeton telephone purchase,
account with your please make sure we
(Up to $100,000 per day) bank account information have your bank account
on file, you may information on file.
1-800/632-2301 open a new account If we do not have this
by phone. information, you will
need to send written
To make a same day instructions with your
investment, please bank's name and
call us by 1:00 p.m. address, a voided
Pacific time or the check or savings
close of the New York account deposit slip,
Stock Exchange, and a signature
whichever is earlier. 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 1:00 p.m. Pacific
time or the close of
the New York Stock
Exchange, whichever is
earlier.
--------------------------------------------------------------------------------
VI. The section "Automatic Investment Plan" on page 15 is replaced with the
following:
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 your minimum initial investment with your
application.
VII. The following section is added to "Investor Services" on page 15:
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.
VIII. The section "Telephone Privileges" on page 15 is replaced with the
following:
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.
IX. The last paragraph of the "Exchange Privilege" section on page 16 is
replaced with the following:
Because excessive trading can hurt fund performance, operations and
shareholders, the fund, effective November 1, 2000, 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 20).
X. In the Selling Shares table on page 18 the section "By Electronic Funds
Transfer (ACH)" is replaced with the following:
--------------------------------------------------------------------------------
[Insert graphic of You can call or write to have redemption proceeds
three lightning bolts] sent to a bank account. See the policies above for
BY ELECTRONIC FUNDS selling shares by mail or phone.
TRANSFER (ACH)
Before requesting to have redemption proceeds sent
to a bank account, please make sure we 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 1:00
p.m. Pacific time, proceeds sent by ACH generally
will be available within two to three business days.
--------------------------------------------------------------------------------
XI. The section "Market Timers" on page 20 is replaced with the following:
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.
XII. The first category in the section "Additional Policies" on page 20 is
revised to read:
o The fund may restrict or refuse any order to buy shares, including any
purchase under the exchange privilege.
Please keep this supplement for future reference.
